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The V-Ray Denoiser takes an existing render and applies a denoising operation to it after the image is completely rendered out via normal means. The denoising operation detects areas where noise is present and smooths them out.

Because the V-Ray Denoiser operates on other render elements rather than being part of the rendering process itself, the denoising operation does not require rerendering of the scene. The Denoiser settings can be quickly changed and tested over and over to improve the result.

Although V-Ray Denoiser is a render channel, for ease of access it is directly positioned under a separate rollout in the Settings tab. Don't search for the Denoiser in the Render Elements list. Just enable it from the Render rollout and if needed adjust its settings from the Advanced panel.

VRayDenoiser offers a choice between the default V-Ray denoiser, the NVIDIA AI denoiser and the Intel Open Image denoiser (V-Ray's implementation of the Intel® Open Image Denoise).. Each offers a different denoising algorithm that comes with different benefits.

V-Ray – V-Ray's denoising algorithm. It can utilize the CPU or the GPU (AMD or NVIDIA GPUs) to perform the denoising. It is consistent when denoising render elements, as it applies the same denoising operator to all render channels. This means that it is recommended for denoising the render elements to be used for compositing back the beauty image. In addition, it comes with a Denoiser Tool, which is recommended for denoising animation by using frame blending.

NVIDIA AI – V-Ray's integration of NVIDIA's AI-based denoising algorithm. The NVIDIA AI denoiser requires an NVIDIA GPU to work, regardless of whether the actual rendering was performed on the CPU or GPU. This means that rendering on the CPU will still require an NVIDIA GPU for denoising with the NVIDIA AI denoiser and has some advantages and drawbacks compared to the Default V-Ray Denoiser. For example, the NVIDIA AI denoiser performs the denoising faster, but is not consistent when denoising render elements. This means that there will be differences between the original RGB image and the one reconstructed from render elements that are denoised with the NVIDIA AI denoiser. It also doesn't support cross-frame denoising and will likely produce flickering when used in animation.

Intel Open Image –  V-Ray's integration of Intel Open Image Denoise. The Intel Open Image denoiser works with your CPU device and does not use hardware acceleration. Like NVIDIA AI, the Intel Open Image denoiser is best suited for interactive rendering.

These options reside in the V-Ray Asset Editor > Settings > Render.

Enable – Turns the Denoiser on or off. When enabled, it automatically adds the Denoiser as a Render Element.

Engine – Allows choosing between the V-Ray Denoiser, NVIDIA AI Denoiser and Intel Open Image Denoise.

Preset – Offers presets to automatically set the strength and radius values. For more information, see the Denoising Presets example below.

Mild – Applies a more subtle level of denoising than the Default preset. 
Default – Applies a mid-level denoising. 
Strong – Applies a stronger level of denoising than the Default preset.
Custom – Allows the strength and radius parameters to be set to custom values.

Strength – Determines how strong the denoising operation is.

Radius – Specifies the area around each pixel to be denoised. A smaller radius affects a smaller range of pixels. A larger radius affects a larger range, which increases the noise removal.

Mode – Specifies how the results of the Denoiser are saved and presented in the VFB.

Only Render Elements – All render elements required for denoising are generated but a denoised version of the image is not computed. VRayDenoiser and effectsResult render channels are not generated. Use this option if you plan to denoise a sequence of images using the standalone denoising tool and do not want to spend time on denoising during the actual rendering process.
Hide Denoiser Channel – The VRayDenoiser channel is not present separately in the VFB. The effectsResult channel is generated with the denoised image.
Show Denoiser Channel – The VRayDenoiser and effectsResult channels are generated.

Update button – Press to regenerate the denoiser channel without having to re-render the scene.