This digital era uses lots of images in communication, which are confidential and large in volume. The transmission channel thus arises the question of security as well as transmission load. To date, several works are there to solve this issue. However, they fail to provide a single unit that gives these two facilities in a unified way. This paper presents a novel technique of unification of image compression and encryption in a single module via sparse-representation of image frames and hyper-chaotic encryption techniques. In this work, we have proposed a method to estimates the sparse vectors of a given image using a regularized trained over-complete dictionary and encrypt the non-zero coefficients of the sparse vectors using key-streams generated by a hyper-chaotic system. This sparse coding based encryption technique provides a higher compression ratio (CR) compared to some recently proposed techniques on one side and increases security level on the other side. Moreover, the security is strengthened by using this key-sequence in different steps in the encryption scheme. Thus the compressed-encrypted outputs are stronger than simple chaotic encryption against any intruder. The efficiency and authenticity of the proposed algorithm are verified through several quality-index e.g. entropy, CR, etc. The resistivity of the proposed algorithm toward the known or chosen-plaintext attack is also analyzed. The results of the key sensitivity test, and cropping attack test also ensure the authors’ claim. The comparison of the proposed technique with some recently published works justifies the reliability of this work.