The blue band (BB) in Iow temperature photoluminescence of Mg-doped GaN films with different Mg concentrations is investigated. The BB peak of as-grown samples with higher Mg concentration centres at lower energy. A shift of the BB peak energy is observed after annealing in N2 at different temperatures. Meanwhile, the difference between the BB peak energies diminishes for raised annealing temperature, and the BB peaks for different samples converge to 2.92eV after annealing at 850℃ . These experimental results can be accounted for by a model based on compensation effect. The shift of BB lines provides a useful criterion for the optimum annealing temperature of the Mg-doped GaN material, and the value is taken to be 850℃ in our case.