A fast algorithm for inverse Cholesky factorization is proposed, to compute a triangular square-root of the estimation error covariance matrix for Vertical Bell Laboratories Layered Space-Time architecture (V-BLAST). It is then applied to propose an improved square-root algorithm for V-BLAST, which speedups several steps in the previous one, and can offer further computational savings in MIMO Orthogonal Frequency Division Multiplexing (OFDM) systems. Compared to the conventional inverse Cholesky factorization, the proposed one avoids the back substitution (of the Cholesky factor), and then requires only half divisions. The proposed V-BLAST algorithm is faster than the existing efficient V-BLAST algorithms. The expected speedups of the proposed square-root V-BLAST algorithm over the previous one and the fastest known recursive V-BLAST algorithm are 3.9~5.2 and 1.05~1.4, respectively.