This paper proposes the design of a novel two-dimensional enhanced multi-diagonal (2D-EMD) code along with the implementation of corresponding architecture for incoherent optical code division multiple access passive optical network (OCDMA-PON). The proposed algorithm is derived by using spatial coding as second dimension in the existing 1D-EMD code to elevate orthogonality within adjacent codes and minimize the interference of subscribers simultaneously accessing the medium. Performance of the proposed 2D-EMD OCDMA system is analyzed through Gaussian approximation and simulation analysis for an agreeable bit error rate (BER) of $$10^{-9}$$ . Analytic analysis shows that the proposed 2D-EMD OCDMA system support more subscribers in comparison with existing systems based on 2D diluted-perfect difference (2D-DPD) and diagonal eigenvalue unity (DEU) codes. Cardinality of the proposed setup surpasses 2D-DPD and 2D-DEU by 5 and 1.8 times for an acceptable BER of $$10^{-9}$$ . Moreover, the optimal communication requirement is satisfied by 2D-EMD system with lowest effective source power of $$-27$$ dBm at 622 Mbps of data. Simulation analysis through a highly recognized software called Optisystem also validates the mathematical analysis and shows that the proposed system can accommodate large number of subscribers at high data rates. Both analytical and simulation analysis proves that the proposed system is able to support next generation PONs.
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