Given an annular link $L$, there is a corresponding augmented link $widetilde{L}$ in $S^3$ obtained by adding a meridian unknot component to $L$. In this paper, we construct a spectral sequence with the second page isomorphic to the annular Khovanov homology of $L$ and it converges to the reduced Khovanov homology of $widetilde{L}$. As an application, we classify all the links with the minimal rank of annular Khovanov homology. We also give a proof that annular Khovanov homology detects unlinks.
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