During tunnel construction, the deformation of surrounding rock and the mechanical response of the supporting structures are significantly influenced by the lateral pressure coefficient λ. Accurate determination of the on-site lateral pressure coefficient is essential for guiding tunnel design and construction. Firstly, the impact of the lateral pressure coefficient on settlement displacement of the tunnel vault and horizontal displacement of the side walls was analyzed theoretically. Secondly, the ratio between horizontal displacement of the side walls and settlement displacement of the vault was monitored, and a numerical simulation was employed to establish a mathematical relationship between the horizontal-vertical displacement coefficient K and the lateral pressure coefficient λ, enabling the inversion of the lateral pressure coefficient. Finally, the inverted lateral pressure coefficient was applied to optimize tunnel cross-section design. The results indicate that, under the same geological conditions, an approximately linear relationship exists between K and λ. Regardless of changes in tunnel depth or surrounding rock conditions, a proportional relationship between horizontal and settlement displacements is maintained, which can be used to invert the lateral pressure coefficient at the tunnel site. By adjusting the tunnel axis ratio m to gradually approach λ^-1, deformation is effectively controlled and the proportion of lining damage is reduced.