The present invention provides a method of making rare earth (RE) doped optical fiber using BaO as co-dopant instead of Al or P commonly used for incorporation of the RE in silica glass by MCVD and solution doping technique. The method comprises deposition of particulate layer of GeO2 doped SiO2 with or without small P2O5 for formation of the core and solution doping by soaking the porous soot layer into an aqueous solution of RE and Ba containing salt. This is followed by dehydration and sintering of the soaked deposit, collapsing at a high temperature to produce the preform and drawing of fibers of appropriate dimension. The use of Ba-oxide enables to eliminate unwanted core-clad interface defect which is common in case of Al doped fibers. The fibers also show good RE uniformity, relatively low optical loss in the 0.6-1.6 μm wavelength region and good optical properties suitable for their application in amplifiers, fiber lasers and sensor devices.