  We present a new distance determination to the Large and Small Magellanic
Clouds using the newly developed red clump stars method (Paczynski and Stanek
1998). This new, single-step, Hipparcos calibrated method seems to be one of
the most precise techniques of distance determination with very small
statistical error due to large number of red clump stars usually available. The
distances were determined independently along four lines-of-sight located at
opposite sides of each Magellanic Cloud. The results for each line-of-sight are
very consistent. For the SMC we obtain the distance modulus:
m-M=18.56+/-0.03+/-0.06 mag (statistical and systematic errors, respectively)
and for the LMC: m-M=18.08+/-0.03+/-0.12} mag where systematic errors are
mostly due to uncertainty in reddening estimates. Both distances will be
refined and systematic errors reduced when accurate reddening maps for our
fields are available. Distance moduli to both Magellanic Clouds are ~0.4 mag
smaller than generally accepted values. The modulus to the LMC is in good
agreement with the recent determinations from RR Lyrae type stars and upper
limit resulting from the SN1987A echo. We suspect that the distance to the LMC
and SMC is shorter by about 15% than previously assumed: 42 kpc and 52 kpc,
respectively.
  We also present our color-magnitude diagrams around the red clump for the LMC
and SMC. We identify vertical red clump, first noted by Zaritsky and Lin
(1997), in the color-magnitude diagram of both Magellanic Clouds and we
interpret it as an evolutionary feature rather than unknown stellar population
between the LMC and our Galaxy.
