Abstract. Iterative regularization methods for nonlinear ill-posed equations of the form $F(a)= y$, where $F: D(F) \subset X o Y$ is an operator between Hilbert spaces $X$ and $Y$, usually involve calculation of the Fr\'{e}chet derivatives of $F$ at each iterate and at the unknown solution $a^\sharp$. A modified form of the generalized Gauss-Newton method which requires the Fr\'{e}chet derivative of $F$ only at an initial approximation $a_0$ of the solution $a^\sharp$ as studied by Mahale and Nair. This work studied an {\it a posteriori} stopping rule of Lepskij-type of the method. A numerical experiment from inverse source potential problem is demonstrated.