Municipal sludge is a sedimentation waste produced during the wastewater process in sewage treatment plants. Among recent studies, pilot and field tests showed that chemical conditioning combined with vacuum preloading can effectively treat municipal sludge. To further understand the drainage and consolidation characteristics of the conditioning sludge during vacuum preloading, a large deformation nonlinear numerical simulation model based on the equal strain condition was developed to simulate and analyze the pilot and field tests, whereas the simulation results were not satisfactory. The results of the numerical analysis of the pilot test showed that the predicted consolidation degree was greater than that measured by the field tests, which is attributed to the relatively low permeability layer formed during the preloading process of the prefabricated vertical drain. To better reflect the consolidation process of the conditioned sludge, a simplified analysis method considering the low permeability layer around the prefabricated vertical drain was proposed. The initial permeability coefficient of the low permeability layer is determined via numerical simulations using finite difference method. The predicted settlement curve was in good agreement with the measured results, which indicated that the numerical simulation based on the equal strain condition considering the relatively low permeability layer can better analyze the consolidation process of ferric chloride-conditioning sludge with vacuum preloading.