High accuracy reference velocity is important for damping network of inertial navigation system, but complexity of underwater environment and movement of carrier bring high frequency and low frequency error into DVL velocity. The traditional damping network is difficult to inhibit high & low frequency error simultaneously. This paper proposes a method of damping network designed optimally based on the complementary filter: 1) DVL velocity error model is constructed, and the characteristic of velocity error in several typical motion state is analyzed; 2) Based on inertial measurement unit and DVL velocity, the designed principles of damping network are discussed, and amplitude-frequency characteristic of different damping network is analyzed; 3) Damping network is designed through the complementary filter that combines the good low frequency characteristic of lag-lead calibration network and high frequency characteristic of constant velocity feedback network. It has both excellent high frequency and low frequency characteristics. Software simulation and experimental results show that the proposed damping network not only eliminate high frequency noise component of inertial devices, but also effectively inhibit high & low frequency error of DVL reference velocity.