When the core of an LVDT displacement sensor deviates from its central position, a non 180° phase shift is induced, causing a mismatch in the amplitudes difference of the output signals from the two secondary coils. This, in turn, leads to a linearity deviation in the signal conditioning circuitry. To address this issue, this paper proposes a digital conditioning and phase compensation method based on discrete Hilbert transform. This method integrates digital moving average filtering and Butterworth low-pass filtering to achieve multilevel signal filtering and processing, ensuring smooth signal output while effectively reducing noise. It accurately compensates for the non 180° phase shift that occurs when the iron core of the LVDT displacement sensor deviates from the central position, and realizes the digital conditioning of its output signals. Experimental results indicate that the theoretical non-linearity of the proposed digital method is ±0. 076% , while the experimental non-linearity is ±0. 093% , showing a significant improvement compared to the non-linearity of ±0. 2% in conventional analog conditioning circuits for LVDT sensors. This method not only demonstrates theoretical validity but also exhibits superior performance in practical applications.