Biometric authentication system is having several security issues. Two security issues are template protection at system database and at communication channel between system database and matcher subsystem of biometric system. In this paper, two level watermarking technique based on CS Theory framework in wavelet domain is proposed for security and authentication of biometric template at these two vulnerable points. In the proposed technique, generate sparse measurement information of fingerprint and iris biometric template using CS theory framework. This sparse measurement information is used as secure watermark information which is embedding into a face image of same individual for generation of multimodal biometric template. Sparse watermark information is computed using Discrete Wavelet transform (DWT) and random seed. The proposed watermarking technique not only provide protection to biometric templates, it also gives computational security against spoofing attack because of it is difficult for imposter to get three secure biometric template information where two encoded biometric template is embed in term of sparse measurement information into third biometric template. Similarity value between original watermark image and reconstructed watermark image is the measuring factor for identification and authentication. The experimental results show that the technique is robust against various attacks.