Perdew-Zunger self-interaction correction (PZ-SIC) offers a route to remove self-interaction errors on an orbital-by-orbital basis. A recent formulation of PZ-SIC by Pederson, Ruzsinszky and Perdew proposes restricting the unitary transformation to localized orbitals called Fermi-Löwdin orbitals. This formulation, called the FLOSIC method, simplifies PZ-SIC calculations and was implemented self-consistently using a Jacobi-like (FLOSIC-Jacobi) iteration scheme. In this work we implement the FLOSIC approach using the Krieger-Li-Iafrate (KLI) approximation to the optimized effective potential (OEP). We compare the results of present FLOSIC-KLI approach with FLOSIC-Jacobi scheme for atomic energies, atomization energies, ionization energies, barrier heights, polarizability of chains of hydrogen molecules etc. to validate the FLOSIC-KLI approach. The FLOSIC-KLI approach, which is within the realm of Kohn-Sham theory, predicts smaller energy gaps between frontier orbitals due to the lowering of eigenvalues of the lowest unoccupied orbitals. Results show that atomic energies, atomization energies, ionization energy as an absolute of highest occupied orbital eigenvalue, and polarizability of chains of hydrogen molecules between the two methods agree within 2%. Finally the FLOSIC-KLI approach is used to determine the vertical ionization energies of water clusters.