The invention relates to a hot water injection circulation viscosity reduction system for producing ultra-deep ultra-heavy oil and an application method thereof, belonging to the field of viscosity reduction production of heavy oil in an oilfield. The hot water injection circulation viscosity reduction system comprises a ground circulation system and an underground circulation viscosity reduction system, wherein the ground circulation system is formed by sequentially connecting a clear water tank, a water softening device, a softened water tank, a water supply pump, a magnetization device, a water jacket furnace and a water injection pump, which are arranged on a circulating injection pipeline, as well as a pressure relief valve on a circulating outflow pipeline; and the underground circulation system adopts a liquid injection and outflow pipeline constituted by a heat insulation oil pipe annulus, a sleeve annulus and a packer, as well as an inner-layer oil pipe, the packer, a sieve pipe and a screw plug to constitute an oil production pipeline. The hot water injection circulation viscosity reduction system according to the invention can reduce the viscosity of heavy oil, be conductive to production of the ultra-deep ultra-heavy oil and solve the problems of low effective pump efficiency, short pump inspection period of high energy consumption in a viscosity reduction process by light oil blending, and further has the advantages of low oil production cost, easiness in popularization and application and the like.