Distributed generations play important role for power quality such as losses reduction, voltage profile and reliability improvement. However on its implementation, to obtain optimal solution installation DG have to be planned properly. Hence, it is important to determine optimal location and size of DG during the planning of active distribution system to achieve minimum losses. This paper proposes the DG placement and sizing technique using K-Means Clustering method. Clustering based technique is used to determine optimal location of DG based on Loss Sensitivity Factor (LSF) and bus voltage. Once optimal location is obtained then analytical approach is used to determine optimal size of DG. The proposed method is tested on IEEE 33 bus and 69 bus radial distribution system to verify its performance on obtaining optimal DG placement and sizing for losses reduction. The result on IEEE 33 bus system shows that the proposed method obtain 87,5% losses reduction, better than 76,77% loss reduction obtained by LSF priority list method. While result on IEEE 69 bus system shows that the proposed method obtain 69,84% losses reduction, better than 65,95% loss reduction obtained by LSF priority list method.