The novel corner cube reflector (CCR) system for a distance measuring interferometer is presented. The proposed system allows reflector lateral displacement evaluation (relative to the beam axis) simultaneously with the interferometer length measurement. Laser beam in measuring arm of the interferometer is divided into two parallel beams that are used for the interferometer distance measurement and lateral shifts of the assembly in relation to the beam axis.The CCR assembly is based on applying a position sensitive detector placed behind the CCR that has truncated vertex. Due to the proposed configuration of the cube corner and photodetector, the rotations of the CCR assembly does not cause error in the lateral displacement measurement in relation to the beam axis.The theoretical analysis and experimental verification of the system metrological feasibilities are presented. The general limitations and design problems are shown. The proposed system can be used basically for measurement and compensation of global or local cosine errors especially in short range of the interferometer displacement measurement, where known techniques are ineffective. Possible applications of the system for Coordinate Measuring Machines accuracy testing are indicated.