A sacrificial film and an alternating stack of insulating layers and sacrificial material layers are sequentially formed over a substrate. A memory stack structure including a memory film and a vertical semiconductor channel is formed through the alternating stack and the sacrificial film on the substrate. A source level cavity is formed by introducing an etchant or a reactant through a backside trench and removing the sacrificial film. After removal of an annular portion of the memory film, a portion of the vertical semiconductor channel is converted into an annular source region by introducing electrical dopants into the channel. A source contact layer is formed in the source level cavity and directly on the annular source region. The sacrificial material layers are replaced with electrically conductive layers. The annular source region and the source contact layer can provide low source contact resistance in a three-dimensional NAND memory device.