System identification with the development of dynamic testing of structures has become one of the useful methods for structural health monitoring and damage detection and also finite element model updating. Identification of structural dynamic parameters is done by using excitation-responses data and includes physical-dynamical parameters such as mass, stiffness and damping matrices and/or modal parameters such as natural frequencies, damping ratios and modal shapes. Block pulse functions (BPFs) are a set of orthogonal functions that are used to approximate the variety of functions. These functions have explicit definition and provide simple formulation of complex problems. In this research, structural dynamic equations have been converted to state space equations and based on input BP coefficients and BP coefficients of displacement responses, a transfer function is extracted for each degree of freedom. Transfer functions include important information such as the eigenvalues of plant matrix. The equalization of transfer functions with ARX model led to estimate the eigenvalues of plant matrix and identification of dynamical parameters of structure is done based on these eigenvalues.To prove the validity and feasibility of proposed method, numerical simulation of the three-story shear frame with determined responses at all degrees of freedom and excited on base level is presented. Also, the accuracy of the identification process by applying noise at different levels to the structure response is investigated. The results reveal the proposed method can be beneficial in structural identification with less computational expenses and high accuracy.