In this paper, we present the algorithm and operation of an aVLSI chip that can extract normal optical flow by using the gradient approach without interfering with the imaging process. This approach is feasible for scaling to larger arrays without affecting the processing or the processing area. Our system has a 92 x 52 photosensitive array of APS pixels at the core with processing circuits on the periphery. We discuss the approach and the different blocks in the design and then demonstrate the working of the individual blocks and of the system as a whole. The chip outputs the image, the spatial and temporal gradients and the normal flow at the read-out frame-rate with no penalty to the imaging process. The chip occupies an area of 4.5 mm2 and consumes 2.6 mW (at Vdd = 5V). Once normal flow is obtained, the chip can be used to compute focus of expansion, time to contact and many other motion properties of images that can be used to control robots. Tracking systems can use the velocity and segmentation of moving objects can be realized using motion discontinuity.