Abstract: In this paper, physical layer security techniques are investigated for the cooperative multi-input multioutput (C-MIMO), which operates as an underlaid cognitive radio system that coexist with a primary user (PU). The underlaid secrecy paradigm is enabled by improving the secrecy rate towards the C-MIMO receiver, and reducing the interference towards the PU. Such a communication model is especially suitable for implementing Industrial Internet-of-Things (IIoT) systems in the unlicensed spectrum, which can trade off spectral efficiency and information secrecy. To this end, we propose an eigenspace-adaptive precoding (EAP) method and formulate the secrecy rate optimization problem, which is subject to both the single device power constraint and the interference power constraint. This precoder design is enabled by decomposing the original optimization problem into eigenspace selection and the power allocation sub-problems. Herein, the eigenvectors are adaptively selected by the transmitter according to the channel conditions of the underlaid users and the PUs. In addition, a simplified EAP method is proposed for large-dimensional C-MIMO transmission, which exploits the additional spatial degree-of-freedom for a low-complexity secrecy precoder design. Numerical results show that by transmitting signal and artificial noise in the properly selected eigenspace, C-MIMO can eliminate the secrecy outage and outperforms the fixed eigenspace precoding methods. Moreover, the proposed simplified EAP method for the large-dimensional C-MIMO can significantly improve the secrecy rate.