Recently, a structure of an optimal linear precoder for multi cell downlink systems has been described in [1, Eq (3.33)]. Other references (e.g., [2,3]) have used simplified versions of the precoder to obtain promising performance gains. These gains have been hypothesized to stem from the additional degrees of freedom that allow for interference mitigation through interference relegation to orthogonal subspaces. However, no conclusive or rigorous understanding has yet been developed. In this paper, we build on an intuitive interference induction trade-off and the aforementioned precoding structure to propose an interference aware RZF (iaRZF) precoding scheme for multi cell downlink systems and we analyze its rate performance. Special emphasis is placed on the induced interference mitigation mechanism of iaRZF. For example, we will verify the intuitive expectation that the precoder structure can either completely remove induced inter-cell or intra-cell interference. We state new results from large-scale random matrix theory that make it possible to give more intuitive and insightful explanations of the precoder behavior, also for cases involving imperfect channel state information (CSI). We remark especially that the interference-aware precoder makes use of all available information about interfering channels to improve performance. Even very poor CSI allows for significant sum-rate gains. Our obtained insights are then used to propose heuristic precoder parameters for arbitrary systems, whose effectiveness are shown in more involved system scenarios. Furthermore, calculation and implementation of these parameters does not require explicit inter base station cooperation.