Observed medical ultrasound images are degraded representations of true tissue images. The degradation is a combination of blurring due to the finite resolution of the imaging system and the observation noise. This paper presents a new wavelet based deconvolution method for medical ultrasound imaging. We design a new orthogonal wavelet basis known as the <i>symmetrical mirror wavelet basis</i> that can provide more desirable frequency resolution. Our proposed ultrasound image restoration with wavelets consists of an inversion of the observed ultrasound image using the estimated two-dimensional (2-D) point spread function (PSF) followed by denoising in the designed wavelet basis. The tissue image restoration is then accomplished by modelling the tissue structures with the generalized Gaussian density (GGD) function using the Bayesian estimation. Both subjective and objective measures show that the deconvolved images are more appealing in the visualization and resolution gain.