An apparatus and method for sample adaptive offset (SAO) to restore intensity shift of processed video data are disclosed. In an encoder side, the processed video data corresponding to reconstructed video data, deblocked-reconstructed video data, or adaptive loop filtered and deblocked-reconstructed video data are partitioned into regions smaller than a picture. The region partition information is signaled in a video bitstream located in a position before intensity offset values syntax. At the decoder side, the processed video data is partitioned into regions according to the partition information parsed from the bitstream at a position before intensity offset values syntax. Region-based SAO is applied to each region based on the intensity offset for the category of the region-based SAO type selected.