In order to improve the luminous efficiency of GaN based LED, a novel type LED model which mainly includes Ag grating, transition layer of indium tin oxide and P-GaN grating was designed. The method that using the structure to stimulate surface plasma for improving luminous characteristics of LED was explored, and the processing technology and manufacturing process of the model was discussed. Based on COMSOL software, the LED model was simulated by finite element method, revealing the principle for the variation of normalized radiant power and normalized loss power with wavelength and electric field distribution under different structure parameters. The simulation result shows that when the thickness of the transition layer is 55 nm, period is 270 nm and duty circle is 0.5, the luminous intensity of the GaN based LED is increased nearly 30 times of the normal LED, which lays a reliable foundation for the research of GaN based LED with high performance.