A method for solving a matrix equation AX=B, wherein A represents a block sparse matrix, B represents a right hand side block vector and X represents a solution block vector. In one embodiment, the method includes receiving the block sparse matrix and the right hand side block vector, constructing a reduced transformed block sparse matrix from the block sparse matrix, constructing a reduced transformed residual block vector from the block sparse matrix and the right hand side block vector, and solving for the solution block vector using the reduced transformed block sparse matrix and the reduced transformed residual block vector.