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Vending Machine can be implemented through microprocessor and FPGA. The microprocessor based vending machines are inefficient in terms of power and speed. However, FPGA based vending machine are more advantageous in terms of speed and power consumption as compared to microprocessor based vending machine. Here in this paper, we proposed an efficient algorithm for implementation of vending machine on FPGA board. It supports four products and two coins. The vending machine accepts coins as inputs in any sequence and delivers products when required amount is deposited and gives back the change if entered amount is greater than the price of product. It also supports cancel feature means a user can withdraw the request any time and entered money will be returned back without any product. The proposed algorithm is implemented in Verilog HDL and simulated using Xilinx StateCAD tool. The design is implemented on Xilinx Spartan-3 xc3s400 FPGA development