We report the design of a waveguide optical isolator based on multimode interferometer (MMI) structure using silicon on insulator (SOI) and deposited magneto-optical (MO) thin films. The optical isolator is based on a vertical 1 × 2 SOI MMI utilizing the nonreciprocal phase shift (NRPS) difference of different TM modes of the MO garnet thin film/SOI waveguide. By constructing a silicon/MO thin film/silicon structure, we demonstrate that the NRPS of the fundamental and first order TM modes can show opposite signs for certain device dimensions, therefore significantly reduce the device length. For a 310.42 μm long device, 20 dB isolation bandwidth larger than 1.6 nm with total insertion loss of 0.817 dB is achieved at 1550 nm wavelength. The fabrication tolerances and materials losses are also discussed to satisfy the state-of-the-art fabrication technology and material properties.