Due to the large bandwidth offered by the optical fiber, its implementation in local area network (LAN) where the traffic is typically bursty could be considered as the strongest candidates for the future high speed optical networks if coding technique is used. This paper presents a new code family named, diagonal permutation shifting (DPS) for spectral amplitude coding-optical code division multiple access (SAC-OCDMA) systems with fixed in-phase cross correlation (CC) and short code length. DPS code derived from well-known prime codes and some matrix operations. The results reveal that the DPS code acts effectively in removing multiple access interface (MAI) and mitigate phase induced intensity noise (PIIN) impact with an adequate signal to interference plus-noise ratio (SINR) and low bit error rate (BER). It has been shown that the DPS code family can suppress intensity noise effectively and improve the system performance significantly.