The high resolution and wide measurement range are important for the displacement measurement based on the grating moiré fringe at present. 50lines/mm coarse grating scale is chosen often in order to carry out the wide range. Therefore, the realization of the high resolution is a difficult problem for coarse grating scale. The paper proposes a new nanometer subdivision method with CCD based on the disadvantages of previous moiré fringe collection method. CCD replaces the traditional photoelectric triode and converts moiré fringe to the pixels signal output, which can improve the moiré fringe quality of grating scale. The pixel is the basis unit of CCD; the pixel number decides directly the measurement resolution and precision. The paper chooses the liner array CCD TCD1501C that has 5000 pixel units and 7μm pixel unit，which ensures the nanometer resolution. The output signals of CCD are processed by amplifier, filter, 12 bit analog-digital converter and sent to the core processor of FPGA. The FPGA consisted of all digital system including CCD driver, subdivision, identification direction, displacement calculation, display and key control functions. The paper gave the principle of nanometer subdivision, block diagram of FPGA module and simulation waveforms.