Al0.2Ga0.sN/GaN samples are grown by metalorganic chemical vapour deposition (MOCVD) method on (0001) sapphire substrates. A 10nm-thick Ni layer is deposited on AlGaN as the transparent Schottky contact. The effect of postannealing in oxygen ambient on the electrical properties of Ni/AlGaN is studied by current voltagetemperature (I-V-T) measurement. The annealing at a relatively low temperature of 300℃ for 90 s results in a decrease of the ideality factor from 2.03 to 1.30 and an increase of the Schottky barrier height from 0.77eV to 0.954 eV. The I-V-T analysis confirms the improvement originated from the formation of NiO, a layer with higher resistatce, which could passivate the surface states of AlGaN and suppress the tunnelling current. Furthermore,the annealing also leads to an increase of the transmittance of the contacts from 57.5% to 78.2%, which would be favourable for AlGaN-based photodetectors.