The current work investigates the influence of annealing at different temperatures on new quaternary Ge20Ag10Te10Se60 films. The phase transition from amorphous to crystalline with annealing is being studied from XRD and supported by TEM analysis. The Raman study shows the change in microstructural changes in terms of vibrational modes. The particle size increased with annealing along with the growth of Ag2Te, AgTe3, GeSe2, Ag2Se phases. The compositional and morphological study is carried out by EDX analysis and FESEM study. The linear optical properties of the material have been calculated from the UV-Visible spectra. The decrease in the optical bandgap of the films upon annealing is due to phase transition and increase in the surface dangling bonds. The static refractive index and the nonlinear refractive index are found to be increased with annealing. The significant increase in 3rd order nonlinear susceptibility with annealing is useful for nonlinear optical applications. The high-frequency dielectric constant increased upon annealing. The structural and optical changes are explained on the basis of amorphous to crystalline transformation and density of defect states. Increased value of nonlinear refractive index with decreased optical electronegativity with annealing is useful for nonlinear and optoelectronic applications.