A method and apparatus for deriving inter-view candidate for a block in a picture for three-dimensional video coding are disclosed. Embodiments of the present invention derive the inter-view candidate from an inter-view collocated block in an inter-view picture corresponding to the current block of the current picture, wherein the inter-view picture is an inter-view reference picture and wherein the inter-view reference picture is in a reference picture list of the current block. The derived inter-view candidate is then used for encoding or decoding of the current motion vector or disparity vector of the current block. One aspect of the invention addresses re-use of the motion information of the inter-view collocated block. Another aspect of the invention addresses constrains on the inter-view picture that can be used to derive the inter-view candidate.