A novel approach has been developed to fabricate a thin layer of titanium oxide (TiO2) on the surface of 316L stainless steel by a combination of Sol-Gel method and subsequent active screen plasma annealing (ASPA) method. Dip coated layers were plasma annealed in a titanium cylindrical mesh from 300 to 500 ℃. The effect of ASPA temperature on the particles size, morphology, and crystallinity of the coating layers was studied in comparison with conventional annealing. Also, electrochemical impedance spectroscopy and potentiodynamic polarization were employed to study the corrosion behavior of both types of coatings. The results showed that, a crack-free TiO2 coating with a thickness of about 1–5 μm can be obtained using the ASPA method at different calcination temperatures. Plasma annealing led to the decline of calcination temperature and formation of nanostructured anatase phase with higher crystallinity and structural uniformity in comparison to conventional annealing method. Moreover, the corrosion resistance of the coating was significantly increased compared to conventional annealing method. It was found that, the coating of titanium oxide can reduce by eight-fold the corrosion rate of 316L stainless steel.