A method of block vector (BV) prediction for an IntraBC mode (Intra-block copy mode) coded block in a video coding system according to the present invention is disclosed. Multiple BV candidate lists are derived from neighboring blocks of the current block. A BV candidate list is selected as a BV predictor for the BV of the current block. The current block is coded based on an Intra reference block located according to the BV of the current block. In one embodiment, a left-bottom (LB) block of the current block is used to derive the first BV candidate list and an above-right (AR) block of the current block is used to derive the second BV candidate list. A 1-bit index code is signaled to select a BV predictor between the first BV candidate list and the second BV candidate list.