Aiming at the displacement of underground pipelines caused by excavation of deep foundation pit, the algorithm for the displacement of the surrounding free soil caused by excavation was proposed based on the two-stage method. Combined with Winkler elastic foundation beam model, the equations for calculating the vertical and horizontal displacement of underground pipelines subjected to additional deformation of soil unloading are established. The displacement of underground pipeline was solved by finite difference method. Then the two-stage method was applied to an engineering example. The results show that the theoretical calculation is in good agreement with the data measured in field. Thus, the rationality and usability of the two-stage method has been verified. The method presented in this paper can be used for analysis of the influences of pipelines buried depth, distance between pipelines, and soil properties on the deformation of pipelines.