This paper proposes an efficient reconfigurable hardware design of dual microphone speech enhancement technique using sound source localization and multi band spectral subtraction methods with elimination of background noise. Firstly, we have used a time delay of arrival algorithm using phase transform (PHAT) to achieve the time difference between the microphone signals. PHAT based filter can reach high SNR gains, which makes it very suitable for localizing the sound source in a microphone array system. After adjustment of the delay between the signals, multi band spectral subtraction technique enhances the signal from the background noise environment in each of the frequency bands. Our design has been implemented in Spartan6 Lx45 FPGA and we have presented the implementation results in terms of subjective and objective evaluations. We have also compared the angular separation between the microphones to the resultant angle between the microphones and observed that proposed design provides very sharp accuracy in every corresponding angle. The objective and subjective evaluation established that our design provides better throughput compared to the existing state of the art research works. The evaluation infers that our proposed hardware induce feasibility for hand-held devices in background noisy environment. © 2019, Springer-Verlag GmbH Germany, part of Springer Nature.