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Large-scale propagation effect plays an important role in multiple-input multiple-output (MIMO) relay systems. In particular, the position of the relay (between the source and destination) determines the path-loss effects of adjacent hops, which will further affect the performance of each hop and thus the relay system. In this paper, by minimizing the outage probability of a decode-and-forward (DF) MIMO relay system with orthogonal space-time block coding, we show that relay position optimization improves the finite-SNR (signal-to-noise ratio) diversity gain of a relay system whose adjacent hops have different diversity orders (unbalanced system). Specifically, with relay position optimization, the diversity gain is no longer bounded by that of the weaker hop, i.e., the hop with a lower diversity order, but approaches the diversity order of the stronger hop. This diversity improvement provides a dramatic improvement for the end-to-end outage probability. It will also be shown that although power allocation has no effects on the achievable diversity order, it provides some SNR gains.