For the precoding problem of multi-user multiple input multiple output (MIMO) downlink system, an effective channel having a block diagonal structure by use of block diagonalization (BD) method was proposed. Based on this effective channel, the mean square error (MSE) of transceiver signals was minimized, such that the two parts of perturbation vector, i.e. the perturbation vector expanding constellation and residual interference vector, were derived and thus the total transmit signals and precoding matrix were obtained. The simulation results show that the proposed method outperforms the conventional zeroforcing (ZF) BD method, the zeroforcing BD vector precoding （VP）, as well as the regularized block diagonalization and its improved methods.