1. A computer based method for compressing digital hyperspectral data having a plurality of spectral bands, each band having a plurality of image pixels N xy , the method comprising: reducing the plurality of spectral bands of the hyperspectral data to a smaller number of spectral bands using principal component analysis (PCA) transform; determining an optimum compression ratio for each of the smaller number of spectral bands for use in a wavelet transform; and subsequently compressing the smaller number of spectral bands spatially using the wavelet transform with the optimum compression ratios, wherein said determining an optimum compression ratio for each of the smaller number of spectral bands includes minimizing the mean square error according to MSE xy ⁡ ( cr 1 , cr 2 , … ⁢ ⁢ cr N r ) = 1 N z ⁢ ∑ m = 1 N r ⁢ [ ⅇ a m ⁡ ( 1 - 1 / cr m b m ) - 1 ] and ∑ m = 1 N r ⁢ 1 cr m = N r cr , wherein N z is the number of spectral bands, N r is the remained hyperspectral dimension after the PCA transform, cr is the spectral compression ratio, cr m is a compression ratio for a spectral component m, and a m and b m are parameters empirically determined for each spectral component.