A new decentralized approach for solving the economic dispatch problem is presented in this paper. The proposed approach consists of either two or three stages. In the first stage, a flooding-based consensus algorithm is proposed in order to achieve consensus among the agents with respect to the units and system data. In the second stage, a suitable algorithm is used for solving the economic dispatch problem in parallel. For cases in which a nondeterministic method is used in the second stage, a third stage is applied to achieve consensus about the final solution of the problem, with a flooding-based consensus algorithm for sharing the information required during this stage. The proposed approach is highly effective for solving the non-convex formulation of the economic dispatch problem and for incorporating transmission losses accurately in a fully decentralized manner. Three case studies that were examined for validation purposes are described. The results obtained demonstrate that the proposed approach aggregates many of the advantages of both centralized and fully decentralized mechanisms for solving the economic dispatch problem.