The invention provides a preparation method of an LED chip and an LED chip prepared by adopting the method. The LED chip comprises an N-type semiconductor layer, a light emitting layer, a P-type semiconductor layer, a current blocking layer and an ITO (Indium Tin Oxide) transparent conducting layer covered on the current blocking layer, and is characterized in that the N-type semiconductor layer, the light emitting layer, the P-type semiconductor layer, the current blocking layer and the ITO transparent conducting layer sequentially grow on a substrate, an N electrode is prepared on the N-type semiconductor layer, a P electrode is prepared on the ITO transparent conducting layer, an SiO2 protection layer is deposited at the upper surface of the chip at the outer side of the N electrode, and an SiON anti-reflection film and an SiO2 protection layer are sequentially deposited at the upper surface of the chip at the outer side of the P electrode. According to the invention, the SiON anti-reflection film is deposited at the surface of the ITO transparent conducting layer, and the SiON anti-reflection film is etched by using a phosphoric acid solution, thereby preventing the ITO transparent conducting film from being damaged or polluted in the manufacturing process of the chip, improving the quality of the ITO transparent conducting layer, enabling the chip voltage to be reduced while improving the brightness of the LED chip, and enabling an LED to be more energy-saving and more environment-friendly.