— In this paper, we propose a two-step precoding approach for multiple-input multiple-output (MIMO) systems by dividing the precoding process into two steps: spatial multiplexing transformation which establishes orthogonalized subchannels with the same quality and beamforming transformation which achieves diversity gain. In the proposed precoding method, we improve the system performance by maximizing the minimum Euclidean distance between the received signals. Compared with the optimal singular value decomposition based precoding methods, the proposed approach significantly reduces the processing complexity as well as the feedback overhead since precoding techniques are based on simple rotation transformations.