Aiming at the problem of low SNR of phase-sensitive optical time domain reflectometer (Ф-OTDR), a de-noising method based on improved variational mode decomposition (VMD) and independent component analysis (ICA) is proposed. First, the simulated annealing method (SA) was used to optimize the VMD. Then, SA-VMD was used to decompose the pre-processed Ф-OTDR signal into a series of intrinsic mode function (IMF) components, and IMF components were selected for virtual noise reconstruction according to relevant criteria. Finally, the original signal and virtual noise were used as the input of ICA to remove noise and improve the SNR of the signal. Experiments were carried out to verify the proposed method on self-designed coherent Ф-OTDR system, and the results show that the method can effectively remove noise. Compared with the SA-VMD and EMD-ICA methods, the SNR is improved by 4dB, which is of great significance to the practical application of the system.