The invention discloses an LED chip with an annular electrode structure and a method for preparing the LED chip. The LED chip is characterized in that a transparent conducting layer is arranged on a p-type GaN layer, a passivation layer is arranged on the transparent conducting layer, an annular tabletop is arranged on an n-type GaN layer, a p electrode is arranged on the transparent conducting layer, and an annular n electrode is arranged on the annular tabletop. The method for preparing the LED chip includes steps of (1), acquiring GaN-based epitaxial slices; (2), etching the annular tabletop by the aid of masks with annular structures; (3), forming the transparent conducting layer; (4), manufacturing the passivation layer; (5), corroding the passivation layer; (6), preparing the p electrode on the passivation layer on a surface of the p-type GaN layer and preparing the n electrode on the annular tabletop. The LED chip and the method have the advantages that the LED chip is providedwith the annular electrode structure, accordingly, the problem of height difference of existing p and n electrodes can be solved, wires are easy to weld, and the etching areas of active layers can bereduced; reflection effects can be realized by the metal electrodes, accordingly, light around the electrodes can be reflected, and the brightness can be improved.