Wireless Sensor Networks usually consists of a large number of tiny sensors with limited computation capability, memory space, power resource and communications capabilities. WSN's are extremely vulnerable to numerous attacks; due to several factors such as unattended deployment and lack of tamper resistant packages. Secure communications in wireless sensor networks is critical. Key management is the fundamental security mechanism in WSN. The objective of key management is to establish and maintain secure channels among communicating nodes. Location based key management protocols are very efficient methods in terms of key connectivity, storage overhead, improving the security and scalability and localizing attacks. Also, dynamic key management assumes long lived networks with more frequent addition of new nodes thus requiring network rekeying for sustained security and survivability. In this paper, we proposed a new location based hybrid and dynamic key management scheme that establishes secret keys between sensor nodes. The hybrid scheme reduces the high cost public key operations at the sensor side and replaces them with efficient symmetric key based operations. The proposed system can efficiently resist cloning attack and sybil attack where the attacker can copy the certificate of a node, public key, private key and the node ID to launch these attacks.