An improved CAM-clay constitutive model for cyclic load is incorporated into the framework of general-purpose FEM software ABAQUS by using the implicit integration algorithm to investigate the failure mechanism of instability of the large-diameter cylindrical-soft soil foundation coupling system. The comparison result of experimental data given by the other authors with the numerical analysis using the proposed model verifies that this model can simulate the accumulation effect of deformation and extra pore pressure in soft clay. On this basis an elasto-plastic effective stress analysis model for soil foundation of large-diameter cylindrical structure is established. The different deformation modes and failure mechanisms of instability of the cylinder-foundation coupling system under wave-induced cyclic load with different amplitudes are investigated. The result indicates that the larger the amplitude of cyclic load, the larger cyclic displacement of soil-structure coupled system will be, but the residual displacement is smaller. When the amplitude is smaller, the residual displacement will be larger and leads to instability of the cylindrical structure.