Two absolute energy minimum principles are developed for first-principle linear-scaling electronic structure calculations. One is with a normalization constraint and the other without any constraint. The density matrix is represented by a set of nonorthogonal localized orbitals and an auxiliary matrix which at the minimum becomes a generalized inverse of the overlap matrix of the localized orbitals. The number of localized orbitals is allowed to exceed the number of occupied orbitals. Comparison with other variational principles is made and numerical tests presented. © 1997 The American Physical Society.