This paper proposes an iterative inter-cluster interference (ICI) cancellation method for cooperative base station systems on the downlink/uplink. System level simulations were conducted with the parameter sets of cluster size and iteration order. The result showed that even in the imperfect CSI case, the spectral efficiency performance of the proposed method with the optimum parameter set is comparable to that of cooperative transmission/reception via MU-MIMO which can completely remove inter-cell interference. In addition, since the proposed method can be practiced in a simple manner, it also has a remarkable advantage to reduce computational complexity. It is a practical way to realize the nationwide wireless systems.