We consider the interference management problem in a multicell MIMO heterogeneous network. Within each cell there is a large number of distributed micro/pico base stations (BSs) that can be potentially coordinated for joint transmission. To reduce coordination overhead, we consider user-centric BS clustering so that each user is served by only a small number of (potentially overlapping) BSs. Thus, given the channel state information, our objective is to jointly design the BS clustering and the linear beamformers for all BSs in the network. In this paper, we formulate this problem from a {sparse optimization} perspective, and propose an efficient algorithm that is based on iteratively solving a sequence of group LASSO problems. A novel feature of the proposed algorithm is that it performs BS clustering and beamformer design jointly rather than separately as is done in the existing approaches for partial coordinated transmission. Moreover, the cluster size can be controlled by adjusting a single penalty parameter in the nonsmooth regularized utility function. The convergence of the proposed algorithm (to a stationary solution) is guaranteed, and its effectiveness is demonstrated via extensive simulation.