Abstract: This paper considers an optimal precoding design for multi-cell multi-user multiple input multiple output (MIMO) networks. It is proposed to expand block diagonalization method of single cell into multicell scenario. Considering the interference leakage to the out-of-cell users, it is proposed to use Leakage Zero Forcing Block Diagonalization method to design the precoding, in which using the extra space freedom degree offered by transmitting side, subspaces spanned by interference channels and other intra-cell users channels are zero-forced. The interference leakage can be suppressed proactively and the intra-cell users interference can be eliminated by the base station (BS), so that the negative factors of the inter-cell interference for the multi-user MIMO system can be decreased. Moreover, the proposed algorithm complexity quantitative analysis shows that the scheme has low computational complexity. Finally, Numerical and simulation results show that this method can greatly improve the transmission rate through a comprehensive simulation analysis of the system performance under different conditions.