A method and apparatus for coding a depth block in three-dimensional video coding are disclosed. Embodiments of the present invention divide a depth block into depth sub-blocks and determine default motion parameters. For each depth sub-block, the motion parameters of a co-located texture block covering the center sample of the depth sub-block are determined. If the motion parameters are available, the motion parameters are assigned as inherited motion parameters for the depth sub-block. If the motion parameters are unavailable, the default motion parameters are assigned as inherited motion parameters for the depth sub-block. The depth sub-block is then encoded or decoded using the inherited motion parameters or a motion candidate selected from a motion candidate set including the inherited motion parameters. The depth block may correspond to a depth prediction unit (PU) and the depth sub-block corresponds to a depth sub-PU.