diff --git a/monai/apps/deepgrow/dataset.py b/monai/apps/deepgrow/dataset.py
new file mode 100644
index 0000000000..45cfbde6ea
--- /dev/null
+++ b/monai/apps/deepgrow/dataset.py
@@ -0,0 +1,281 @@
+# Copyright 2020 - 2021 MONAI Consortium
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#     http://www.apache.org/licenses/LICENSE-2.0
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+import logging
+import os
+from typing import Dict, List
+
+import numpy as np
+
+from monai.transforms import AsChannelFirstd, Compose, LoadImaged, Orientationd, Spacingd
+from monai.utils import GridSampleMode
+
+
+def create_dataset(
+    datalist,
+    output_dir: str,
+    dimension,
+    pixdim,
+    image_key: str = "image",
+    label_key: str = "label",
+    base_dir=None,
+    limit: int = 0,
+    relative_path: bool = False,
+    transforms=None,
+) -> List[Dict]:
+    """
+    Utility to pre-process and create dataset list for Deepgrow training over on existing one.
+    The input data list is normally a list of images and labels (3D volume) that needs pre-processing
+    for Deepgrow training pipeline.
+
+    Args:
+        datalist: A list of data dictionary. Each entry should at least contain 'image_key': <image filename>.
+            For example, typical input data can be a list of dictionaries::
+
+                [{'image': <image filename>, 'label': <label filename>}]
+
+        output_dir: target directory to store the training data for Deepgrow Training
+        pixdim: output voxel spacing.
+        dimension: dimension for Deepgrow training.  It can be 2 or 3.
+        image_key: image key in input datalist. Defaults to 'image'.
+        label_key: label key in input datalist. Defaults to 'label'.
+        base_dir: base directory in case related path is used for the keys in datalist.  Defaults to None.
+        limit: limit number of inputs for pre-processing.  Defaults to 0 (no limit).
+        relative_path: output keys values should be based on relative path.  Defaults to False.
+        transforms: explicit transforms to execute operations on input data.
+
+    Raises:
+        ValueError: When ``dimension`` is not one of [2, 3]
+        ValueError: When ``datalist`` is Empty
+
+    Returns:
+        A new datalist that contains path to the images/labels after pre-processing.
+
+    Example::
+
+        datalist = create_dataset(
+            datalist=[{'image': 'img1.nii', 'label': 'label1.nii'}],
+            base_dir=None,
+            output_dir=output_2d,
+            dimension=2,
+            image_key='image',
+            label_key='label',
+            pixdim=(1.0, 1.0),
+            limit=0,
+            relative_path=True
+        )
+
+        print(datalist[0]["image"], datalist[0]["label"])
+    """
+
+    if dimension not in [2, 3]:
+        raise ValueError("Dimension can be only 2 or 3 as Deepgrow supports only 2D/3D Training")
+
+    if not len(datalist):
+        raise ValueError("Input datalist is empty")
+
+    transforms = _default_transforms(image_key, label_key, pixdim) if transforms is None else transforms
+    new_datalist = []
+    for idx in range(len(datalist)):
+        if limit and idx >= limit:
+            break
+
+        image = datalist[idx][image_key]
+        label = datalist[idx].get(label_key, None)
+        if base_dir:
+            image = os.path.join(base_dir, image)
+            label = os.path.join(base_dir, label) if label else None
+
+        image = os.path.abspath(image)
+        label = os.path.abspath(label) if label else None
+
+        logging.info("Image: {}; Label: {}".format(image, label if label else None))
+        data = transforms({image_key: image, label_key: label})
+        if dimension == 2:
+            data = _save_data_2d(
+                vol_idx=idx,
+                vol_image=data[image_key],
+                vol_label=data[label_key],
+                dataset_dir=output_dir,
+                relative_path=relative_path,
+            )
+        else:
+            data = _save_data_3d(
+                vol_idx=idx,
+                vol_image=data[image_key],
+                vol_label=data[label_key],
+                dataset_dir=output_dir,
+                relative_path=relative_path,
+            )
+        new_datalist.extend(data)
+    return new_datalist
+
+
+def _default_transforms(image_key, label_key, pixdim):
+    keys = [image_key] if label_key is None else [image_key, label_key]
+    mode = [GridSampleMode.BILINEAR, GridSampleMode.NEAREST] if len(keys) == 2 else [GridSampleMode.BILINEAR]
+    return Compose(
+        [
+            LoadImaged(keys=keys),
+            AsChannelFirstd(keys=keys),
+            Spacingd(keys=keys, pixdim=pixdim, mode=mode),
+            Orientationd(keys=keys, axcodes="RAS"),
+        ]
+    )
+
+
+def _save_data_2d(vol_idx, vol_image, vol_label, dataset_dir, relative_path):
+    data_list = []
+
+    if len(vol_image.shape) == 4:
+        logging.info(
+            "4D-Image, pick only first series; Image: {}; Label: {}".format(
+                vol_image.shape, vol_label.shape if vol_label else None
+            )
+        )
+        vol_image = vol_image[0]
+        vol_image = np.moveaxis(vol_image, -1, 0)
+
+    image_count = 0
+    label_count = 0
+    unique_labels_count = 0
+    for sid in range(vol_image.shape[0]):
+        image = vol_image[sid, ...]
+        label = vol_label[sid, ...] if vol_label is not None else None
+
+        if vol_label is not None and np.sum(label) == 0:
+            continue
+
+        image_file_prefix = "vol_idx_{:0>4d}_slice_{:0>3d}".format(vol_idx, sid)
+        image_file = os.path.join(dataset_dir, "images", image_file_prefix)
+        image_file += ".npy"
+
+        os.makedirs(os.path.join(dataset_dir, "images"), exist_ok=True)
+        np.save(image_file, image)
+        image_count += 1
+
+        # Test Data
+        if vol_label is None:
+            data_list.append(
+                {
+                    "image": image_file.replace(dataset_dir + os.pathsep, "") if relative_path else image_file,
+                }
+            )
+            continue
+
+        # For all Labels
+        unique_labels = np.unique(label.flatten())
+        unique_labels = unique_labels[unique_labels != 0]
+        unique_labels_count = max(unique_labels_count, len(unique_labels))
+
+        for idx in unique_labels:
+            label_file_prefix = "{}_region_{:0>2d}".format(image_file_prefix, int(idx))
+            label_file = os.path.join(dataset_dir, "labels", label_file_prefix)
+            label_file += ".npy"
+
+            os.makedirs(os.path.join(dataset_dir, "labels"), exist_ok=True)
+            curr_label = (label == idx).astype(np.float32)
+            np.save(label_file, curr_label)
+
+            label_count += 1
+            data_list.append(
+                {
+                    "image": image_file.replace(dataset_dir + os.pathsep, "") if relative_path else image_file,
+                    "label": label_file.replace(dataset_dir + os.pathsep, "") if relative_path else label_file,
+                    "region": int(idx),
+                }
+            )
+
+    if unique_labels_count >= 20:
+        logging.warning(f"Unique labels {unique_labels_count} exceeds 20. Please check if this is correct.")
+
+    logging.info(
+        "{} => Image Shape: {} => {}; Label Shape: {} => {}; Unique Labels: {}".format(
+            vol_idx,
+            vol_image.shape,
+            image_count,
+            vol_label.shape if vol_label is not None else None,
+            label_count,
+            unique_labels_count,
+        )
+    )
+    return data_list
+
+
+def _save_data_3d(vol_idx, vol_image, vol_label, dataset_dir, relative_path):
+    data_list = []
+
+    if len(vol_image.shape) == 4:
+        logging.info(
+            "4D-Image, pick only first series; Image: {}; Label: {}".format(
+                vol_image.shape, vol_label.shape if vol_label else None
+            )
+        )
+        vol_image = vol_image[0]
+        vol_image = np.moveaxis(vol_image, -1, 0)
+
+    image_count = 0
+    label_count = 0
+    unique_labels_count = 0
+
+    image_file_prefix = "vol_idx_{:0>4d}".format(vol_idx)
+    image_file = os.path.join(dataset_dir, "images", image_file_prefix)
+    image_file += ".npy"
+
+    os.makedirs(os.path.join(dataset_dir, "images"), exist_ok=True)
+    np.save(image_file, vol_image)
+    image_count += 1
+
+    # Test Data
+    if vol_label is None:
+        data_list.append(
+            {
+                "image": image_file.replace(dataset_dir + os.pathsep, "") if relative_path else image_file,
+            }
+        )
+    else:
+        # For all Labels
+        unique_labels = np.unique(vol_label.flatten())
+        unique_labels = unique_labels[unique_labels != 0]
+        unique_labels_count = max(unique_labels_count, len(unique_labels))
+
+        for idx in unique_labels:
+            label_file_prefix = "{}_region_{:0>2d}".format(image_file_prefix, int(idx))
+            label_file = os.path.join(dataset_dir, "labels", label_file_prefix)
+            label_file += ".npy"
+
+            curr_label = (vol_label == idx).astype(np.float32)
+            os.makedirs(os.path.join(dataset_dir, "labels"), exist_ok=True)
+            np.save(label_file, curr_label)
+
+            label_count += 1
+            data_list.append(
+                {
+                    "image": image_file.replace(dataset_dir + os.pathsep, "") if relative_path else image_file,
+                    "label": label_file.replace(dataset_dir + os.pathsep, "") if relative_path else label_file,
+                    "region": int(idx),
+                }
+            )
+
+    if unique_labels_count >= 20:
+        logging.warning(f"Unique labels {unique_labels_count} exceeds 20. Please check if this is correct.")
+
+    logging.info(
+        "{} => Image Shape: {} => {}; Label Shape: {} => {}; Unique Labels: {}".format(
+            vol_idx,
+            vol_image.shape,
+            image_count,
+            vol_label.shape if vol_label is not None else None,
+            label_count,
+            unique_labels_count,
+        )
+    )
+    return data_list
diff --git a/tests/min_tests.py b/tests/min_tests.py
index 0fd6985067..e2c7bc529a 100644
--- a/tests/min_tests.py
+++ b/tests/min_tests.py
@@ -104,6 +104,7 @@ def run_testsuit():
         "test_handler_metrics_saver_dist",
         "test_evenly_divisible_all_gather_dist",
         "test_handler_classification_saver_dist",
+        "test_deepgrow_dataset",
     ]
     assert sorted(exclude_cases) == sorted(set(exclude_cases)), f"Duplicated items in {exclude_cases}"
 
diff --git a/tests/test_deepgrow_dataset.py b/tests/test_deepgrow_dataset.py
new file mode 100644
index 0000000000..e871c328a6
--- /dev/null
+++ b/tests/test_deepgrow_dataset.py
@@ -0,0 +1,57 @@
+# Copyright 2020 - 2021 MONAI Consortium
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#     http://www.apache.org/licenses/LICENSE-2.0
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+import os
+import tempfile
+import unittest
+
+import nibabel as nib
+import numpy as np
+
+from monai.apps.deepgrow.dataset import create_dataset
+
+
+class TestCreateDataset(unittest.TestCase):
+    def _create_data(self, tempdir):
+        affine = np.eye(4)
+        image = np.random.randint(0, 2, size=(128, 128, 40))
+        image_file = os.path.join(tempdir, "image1.nii.gz")
+        nib.save(nib.Nifti1Image(image, affine), image_file)
+
+        label = np.zeros((128, 128, 40))
+        label[0][1][0] = 1
+        label[0][1][1] = 1
+        label[0][0][2] = 1
+        label[0][1][2] = 1
+        label_file = os.path.join(tempdir, "label1.nii.gz")
+        nib.save(nib.Nifti1Image(label, affine), label_file)
+
+        return [{"image": image_file, "label": label_file}]
+
+    def test_create_dataset_2d(self):
+        with tempfile.TemporaryDirectory() as tempdir:
+            datalist = self._create_data(tempdir)
+            output_dir = os.path.join(tempdir, "2d")
+            deepgrow_datalist = create_dataset(datalist=datalist, output_dir=output_dir, dimension=2, pixdim=(1, 1))
+            self.assertEqual(len(deepgrow_datalist), 3)
+            self.assertEqual(deepgrow_datalist[0]["region"], 1)
+
+    def test_create_dataset_3d(self):
+        with tempfile.TemporaryDirectory() as tempdir:
+            datalist = self._create_data(tempdir)
+            output_dir = os.path.join(tempdir, "3d")
+            deepgrow_datalist = create_dataset(datalist=datalist, output_dir=output_dir, dimension=3, pixdim=(1, 1, 1))
+            self.assertEqual(len(deepgrow_datalist), 1)
+            self.assertEqual(deepgrow_datalist[0]["region"], 1)
+
+
+if __name__ == "__main__":
+    unittest.main()