A video coding system determines a Sample Adaptive Offset (SAO) type for a current reconstructed block, and determines SAO offsets for the current reconstructed block and checks if all SAO offsets are zeros except for a last SAO offset if the SAO type is Edge Offset (EO) or Band Offset (BO). A new value for the last SAO offset is derived at an encoding end or an original value for the last SAO offset is derived at a decoding end if all SAO offsets except for the last SAO offset are zeros. The SAO offsets are used for applying SAO processing to the current block and the current block is encoded or decoded. The original value for the last SAO offset is used in SAO processing and the new value for the last SAO offset is signaled in a video bitstream.