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In this paper, we propose an improved orthogonal resource allocation algorithm (iORAA), which is designed to incorporate with the OFDMA-based cellular wireless system architecture using relays (OCWSAR) in order to reduce the inter-cell interference (ICI) significantly for mobile stations (MSs), especially, cell-edge MSs while maintaining the sector frequency reuse factor at 1. Thanks to that, the cell data throughput is also improved. The performance of the proposed algorithm is evaluated in a multicell/multi-user environment, where the effect of the iORAA can be evaluated precisely in the presence of ICI. Numerical results show that the new system with the associated algorithm yield high SINR distribution and data throughput for cell-edge MSs over the conventional algorithms.