Asset management is an important topic in all fields especially in power system which has very high investment costs and very expensive elements. Reliability Centered Asset Management (RCAM) is an effective technique to perform the power system asset management with quantitative methods such that, on the one hand, the total cost is minimized and, on the other hand, the reliability of the system is maximized Nevertheless, the need for an appropriate optimization-based algorithm for RCAM implementation in power system is still sensed. This paper proposes an algorithm to fulfil such needs including the following steps. First, the component reliability importance index is calculated for all components of the system. Then, a set of all potential maintenance strategies of each component are defined and together with the component reliability importance indices are used as inputs in the third step. In the third step, an optimization problem is proposed to select the optimum maintenance strategy for each component in the system. The proposed three-step algorithm is tested on a Swedish distribution system. The results highlight the advantages of the proposed method for well-organizing the maintenance strategies for all components of the system.