We present a method for the approximate solution of the coupled-cluster (CC) equation, based upon the singular value decomposition (SVD). The key idea of this method is that we use SVD for the cluster amplitudes to exploit the physically important states in the CC equation. This method enables us to significantly reduce the computational requirements for CC calculations without losing the essence of the method. Relationships to the density matrix renormalization group theory and the local correlation methods are mentioned. We perform pilot calculations on some atoms and molecules to investigate the applicability of the method. (C) 2003 American Institute of Physics.