This invention provides a joint power allocation, precoding, and decoding method and a base station thereof. They are applicable to multiple-input multiple-output non-orthogonal multiple access (MIMO-NOMA) systems. The method includes: (1) decomposing the precoder for each cluster into a first precoder and a second precoder; (2) obtaining the mean-squared error (MSE) functions of the decoded signals for all user equipment devices in each cluster; (3) calculating the power allocation factors for each cluster in the case of minimizing the maximum of all the MSE functions in each cluster; and (4) obtaining the second precoder and the decoders for each cluster in the case of minimizing a sum of the MSE functions of the decoded signals for all user equipment devices in all clusters under a total power constraint according to the power allocation factors.