To meet the performance requirements of co-focusing and co-phasing of segmented mirror active optics (SMAO) in modern astronomical telescope, micro-displacement actuators with nanometer resolution and millimeter stroke are necessary. The design and test of a micro-displacement actuator based on giant magnetostrictive material is present in this paper. The actuator’s main components, such as giant magnetostrictive drive core, displacement pantograph mechanism and output guide mechanism, are discussed in detailed. The giant magnetostrictive drive mechanism generally may offer nanometer resolution and micron stroke. A displacement/stroke pantograph mechanism is designed with absolutely sealed flexible hydraulic structure (ASFHS) to enlarge the stroke. In addition, a secondary giant magnetostrictive drive mechanism is integrated to serve final resolution of final displacement output. In view of flexure exhibiting excellent mechanical properties free of friction, clearance and lubrication, a flexure guide mechanism with the capacity of excellent lateral load is designed to fulfill linear displacement output steadily. The sub-systems like the giant magnetostrictive drive core and displacement pantograph mechanism have been tested before integration of the whole actuator. The final test of the actuator is carried out with dual frequency laser interferometer at lab. Besides, to meet technical requirements of future extremely large telescope, further development issues mainly related to application practice of the actuator is discussed at the end.