Aiming at the problem that the temporal resolution of correlation method in ultrasonic water meter can only reach the sampling period, a time delay estimation method based on correlation method with low sampling rate is proposed. Firstly, the maximum time delay in ultrasonic water meter is studied. Secondly, the specific application of correlation method in ultrasonic water meter and the function of interpolation algorithm to improve the accuracy of flow measurement are discussed. Finally, MATLAB software is used to simulate the algorithm and evaluate the estimation accuracy of the algorithm under the condition of actual noise, and the flow measurement system is built to prove the effectiveness of the algorithm. The simulation results show that the average absolute error of time delay estimation is within 100 picoseconds when the frequency of ultrasonic transducer is 1 MHz and the sampling frequency is 4 MHz. It is shown that the proposed algorithm can achieve high precision delay estimation at low sampling frequency and is superior to the traditional correlation method in the accuracy of delay estimation.