The invention discloses a lithium niobate optical waveguide device and a manufacturing method thereof. The method comprises the steps that dielectric films with the anti-reflection effect are manufactured on the upper surface and the lower surface of an x-cut lithium niobate substrate; optical waveguide masking windows are etched on the dielectric films in the Y-axis direction; optical waveguides are manufactured on the upper surfaces of the portions, inside the masking windows, of the lithium niobate substrate; a modulator electrode is manufactured; the light input end face and the light output end face of the lithium niobate substrate are cut, and dielectric films with the anti-reflection effect are manufactured on the light input end face and the light output end face. By the adoption of the method, the polarization extinction ratio of a lithium niobate optical waveguide chip can be significantly improved, and the optical property of the chip is improved.