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In IP-Over-WDM networks, a set of lightpaths (alloptical communication paths) established between IP routers defines the virtual topology. In the event of changes in traffic, the objective function value of the network (virtual topology) may be affected leading to decreased network performance. Thus, the underlying virtual topology needs to be changed in response to the changing traffic patterns at the higher layers. This process of changing the virtual topology to meet the traffic requirement is called as reconfiguration. In this paper, we propose a distributed algorithm for virtual topology reconfiguration in the event of traffic changes in IP-Over-WDM networks.