While Picture Archiving and Communicating System project is underway through out the western countries, China is making a revolutionary advance in digital medical record. Hospitals in China have made their first steps toward implementation of PACS. Due to the ever-increasing amount of medical image data, a completed archive server is of great need as the base of filmless radiology, a cost effective, high performance digital archive system will remain as the most essential and challenging part of PACS. However there is an inevitable and inherent dilemma in those hospitals in the developing countries like China -- limited amount of development funds. So we are urged to design a low cost but efficient image archive system to cater to the expectation of the hospital. This paper describes a high capacity PACS image archive system model that is developed with rather low cost. To build a reliable and flexible image archive system involves a number of factors such as system capacity requirement, storage and retrieval performance and cost saving etc. We have undertaken the hierarchy image storage mechanism. Judicious image dispatch is employed to meet the goal of timely image retrieval. The whole design can be divided into two parts, one is Scheduled Image Flow Service (SIFS) whose purpose is to periodically backup, archive and pre-fetch image, the other one is Online Image Retrieval Service (OIRS) to provide quick access to the online and nearline images through the network interface. Automatic image transfer is realized between different storage tiers with high level of control. All the procedure is highly automatic except the manually depositing and undepositing off-line optical disks. System evaluations on random retrieval time are presented to show the effect of image location. The concept of image tiered storage will largely reduce the cost of storage. Real-time response to the retrieval demand can send wanted images to a radiologist in a reasonable time. We have done some beneficial trials on how to implement large scale and high performance PACS image archive system under the condition of short of fund. At the same time, according to the characteristic of those storage media whose price will drop down around the clock. The archive system should be capable of being scaled to higher level smoothly. When the purchase of new storage device can be guaranteed, new component will be integrated flexibly and easily. With the advent of digital era, digital medical record will become a big trend of information management in those developing countries. Our work will be a great impetus to the substitute of optical jukebox for the conventional storage medium -- film.