The quick deployment and flexible characteristics of wireless ad hoc networks make them suitable for many commercial and daily life applications. A most challenging task in these distributed networks is ensuring quality of service to end-to-end user in presence of wireless channel, random network topology, unpredictable traffic patterns, and shared resources. The performance of network is limit by the amount of interference in the network in case of simultaneous transmission over same frequency band. In this paper, we address interference issue in presence of nakagami fading and lognormal shadowing channel conditions and proposed an Interference Aware Cooperative Routing (IACR) approach to manage routing operations between nodes. The presented model reflects realistic scenarios for urban areas where fading and shadowing occurs due to tall buildings in the neighborhood of transmitters. The proposed solution establishes routes between source and destination by introducing cooperation among network nodes. Each node in the network selects path such that interference created by it towards other nodes is minimized taking into account that the Signal to Interference plus Noise Ratio (SINR) at destination does not decreases a threshold value. Hence, the presented approach reduces amount of overall interference in the network without degrading the quality of individual route. The simulation results show that the performance of proposed solution is better than conventional hop count and interference aware routing algorithms in terms of throughput and outage probability of the network.