A new method is introduced for sequential estimation of TDOA (time delay of arrival) and FDOA (frequency delay of arrival) in a two sensor array. The proposed scheme is basically a two step algorithm utilizing 1-dimensional slice functions of the third order cumulants between two signal measurements, and is capable of suppressing the effect of correlated Gaussian measurement noises. It is demonstrated that the proposed algorithm outperforms existing TDOA/FDOA estimation algorithms from the viewpoint of computational burden and in the sense of mean squared error as well.