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The operation of drones in cluttered environments like forests and hilly areas is extremely difficult; it is impossible to use drones autonomously without having built-in information to detect and avoid obstacles. The vision based obstacle avoidance algorithm is presented in this paper, with extensions to UAV navigation. The proposed method is incorporated on a stereo vison multi copter using a block matching algorithm. The stereo vision baseline is based on horizontal configuration and computes the depth using a sum of absolute difference algorithm. The image processing node (LabVIEW vi) and the controller node are run on a remote laptop. This vi computes the distance between the multirotor and an obstacle and transmits depth data to an onboard flight controller through the MAVLink protocol. The algorithm efficiency was tested using the software in the loop on Gazebo simulator to analyze the performance of the UAV. The hardware in loop results are also shown in this paper after the successful flight test.