Modern very large scale integration technology is based on fixed-outline floorplan constraints, mostly with an objective of minimizing area and wirelength between the modules. The aim of this work is to minimize the unused area, that is, dead space in the floorplan, in addition to these objectives. In this work, a Simulated Annealing Algorithm (SAA) based heuristic, namely Simulated Spheroidizing Annealing Algorithm (SSAA) has been developed and improvements in the proposed heuristic algorithm is also suggested to improve its performance. Exploration capability of the proposed algorithm is due to the mechanism of reducing the uphill moves made during the initial stage of the algorithm, extended search at each temperature and the improved neighborhood search procedure. The proposed algorithm has been tested using two kinds of benchmarks: Microelectronics Center of North Carolina (MCNC) and Gigascale Systems Research Center (GSRC). The performance of the proposed algorithm is compared with that of other stochastic algorithms reported in the literature and is found to be efficient in producing floorplans with very minimal dead space. The proposed SSAA algorithm is also found more efficient for problems of larger sizes.