PngBitmapDecoder Class

// Open a Stream and decode a PNG image
Stream imageStreamSource = new FileStream("smiley.png", FileMode.Open, FileAccess.Read, FileShare.Read);
PngBitmapDecoder decoder = new PngBitmapDecoder(imageStreamSource, BitmapCreateOptions.PreservePixelFormat, BitmapCacheOption.Default);
BitmapSource bitmapSource = decoder.Frames[0];

// Draw the Image
Image myImage = new Image();
myImage.Source = bitmapSource;
myImage.Stretch = Stretch.None;
myImage.Margin = new Thickness(20);

            int width = 128;
            int height = 128;
            int stride = width;
            byte[] pixels = new byte[height * stride];

            // Define the image palette
            BitmapPalette myPalette = BitmapPalettes.Halftone256;

            // Creates a new empty image with the pre-defined palette

            BitmapSource image = BitmapSource.Create(
                width,
                height,
                96,
                96,
                PixelFormats.Indexed8,
                myPalette,
                pixels,
                stride);

            FileStream stream = new FileStream("new.png", FileMode.Create);
            PngBitmapEncoder encoder = new PngBitmapEncoder();
            TextBlock myTextBlock = new TextBlock();
            myTextBlock.Text = "Codec Author is: " + encoder.CodecInfo.Author.ToString();
            encoder.Interlace = PngInterlaceOption.On;
            encoder.Frames.Add(BitmapFrame.Create(image));
            encoder.Save(stream);