This study builds up an elliptical cylindrical equivalent model (ECEM) of prefabricated vertical drains (PVD)‐improved foundation which incorporates the nonlinear variation of compressibility and permeability and the preconsolidate state of soil. An exact solution and a simplified solution are derived for the nonlinear consolidation model under a combined vacuum and surcharge preloading. Considering the stratification of improved soil and the reduction of vacuum pressure along PVD, a precise settlement prediction method is proposed. The rightness and applicability of present solutions are verified by carrying out a series of comparative analyses. Also, a parametric study is conducted to investigate the characteristics of nonlinear consolidation under different Nσ, Cnormalc/Cnormalk, over‐consolidation ratios (OCRs). The results show that, when Cnormalc/Cnormalk=1 the applied load has no impact on the dissipation of excess pore‐water pressure, whereas a larger applied load would induce a quicker settlement rate; the consolidation rate would be underestimated if the over‐consolidated stress history is neglected, and greater OCR produces more obvious underestimation.