Fading correlation is an obstacle that degrades the potential capacity of Multiple Input and Multiple Output (MIMO) channels. This paper proposes a hybrid MIMO system that mitigates the throughput loss in highly correlated propagation channels. In the proposed system, the transmitter uses the spatial multiplexing scheme or the selection transmit diversity scheme according to information fed back from the receiver. The receiver determines which of the two transmission schemes provides higher throughput from the metrics of the spatial correlation and Signal to Noise Ratio (SNR) of the channel. We define the spatial correlation for MIMO channels, and by computer simulations obtain throughput loss as a function of spatial correlation for the spatial multiplexing scheme. The obtained data is used for transmission scheme selection. Since the feedback information contains only commands of the selected transmission scheme and symbol constellation size, bandwidth loss due to the feed back is acceptable. Simulation results show that by using spatial correlation the proposed system can switch from the spatial multiplexing scheme to the transmit diversity scheme in highly correlated propagation environments, and so mitigate the severe throughput loss which occurs in conventional non hybrid spatial multiplexing MIMO systems.