Three-dimensional memory device containing annular etch-stop spacer and method of making thereof

A method of forming a monolithic three-dimensional memory device, comprising:

• forming a first alternating stack of first insulating layers and first sacrificial material layers over a substrate;
• forming a first insulating cap layer over the first alternating stack;
• forming memory region recesses by patterning the first insulating cap layer;
• forming annular spacers at peripheries of the memory region recesses;
• forming a second insulating cap layer on the annular spacers and the first insulating cap layer;
• forming lower memory openings through the annular spacers and through the first alternating stack;
• forming sacrificial pillar structures in the lower memory openings;
• forming a second alternating stack of second insulating layers and second sacrificial material layers over the second insulating cap layer;
• forming upper memory openings through the second alternating stack and over the sacrificial pillar structures;
• removing the sacrificial pillar structures through the upper memory openings to form memory openings;
• and
• forming memory stack structures in the memory openings, wherein each of the memory stack structures comprises a semiconductor channel and a memory film.