A low complexity precoding method is proposed for practical multiple-input multiple-output (MIMO) systems. Based on the two-step optimal precoder design algorithm that maximizes the lower bound of the mutual information with finite-alphabet inputs, the proposed method simplifies the precoder design by fixing the right singular vectors of the precoder matrix to be the modulation diversity matrix, eliminating the iterative optimization between the two steps, and discretizing the search space of the power allocation vector. The modulation diversity matrices are designed for different modulations, which outperform the existing maximum diversity for BPSK and 8PSK inputs. For a 4×4 channel, the computational complexity of the proposed precoder design is reduced to 3% and 6% of that required by the original two-step algorithm with Quadrature Phase Shift Keying (QPSK) and 8PSK, respectively. The proposed method achieves nearly the same mutual information as the two-step iterative algorithm for a large range of SNR region.