We investigate the transceiver design for interference two-way amplify-and-forward multiple-input multiple-output relay communication systems. A novel algorithm with a closed-form solution is developed to optimize the relay precoding matrix based on its optimal structure and a modified transmission power constraint at the relay node. An iterative algorithm is proposed to minimize the sum mean-squared error of the signal waveform estimation. Simulation results demonstrate that the proposed algorithm achieves a better performance-complexity tradeoff compared with existing techniques.