Thin films of amorphous Se80Te20 alloys with thickness around 250 nm were prepared by vacuum deposition. The as-grown films were annealed in an Argon atmosphere as a function of temperature and time. Optical characterization of the films through various degrees of crystallinity was done in order to estimate the influence of the heat treatment on the optical properties of the thin films. The optical constants of all films, viz., refractive index (n), extinction coefficient (k), absorption coefficient (α) and band gap (Eg) were calculated from the transmission spectra recorded in the wavelength region 400-1900 nm. For the as-deposited films, Eg is found to be 1.5 eV. It is found that the values of Eg are sensitive to the annealing temperature and it increases with increase in temperature. The reasons for the observed variation of optical properties with annealing temperatures are discussed. Also, the different stages of crystallinity were identified using transmission electron microscopy (TEM). It is evident from the results that the thermal treatment of Se80Te20 films has a significant influence in the variation of structural and optical properties of these films and these variations seem to indicate applications in switching devices.