To study the impact of reclamation removal on the surrounding water environment in Yangyu Village on Nan′ao Island, the numerical simulation method was used to analyze the hydrodynamic environment changes of the tide current, the tidal prism and the water exchange half-life time before and after the removal of the reclamation. The results showed that the flow velocity near the gate increased 0.25 m/s, the tidal prism of the harbor increased by 30%, and the half-life time of the water exchange in the harbor was shortened by 1.7 d after the removal of 100 m. In general, demolishing the reclamation which is located in Yangyu Village on Nan′ao Island can enhance the hydrodynamic conditions near the gate, improve the environmental capacity, increase the water exchange capacity of the harbor, and improve water quality and ecological status. This paper can provide scientific evidence and objective guidance for the ecological protection and restoration scheme for the remaining reclamation project in Yangyu Village on Nan′ao Island.