The iron-based Metglas 2605S3A amorphous alloy ribbons are annealed at $435^{circ}C$ for various periods from 5 to 210 min, and the effect of annealing is investigated on the dc magnetic properties of the ribbon. Typical square-type hysteresis loops are observed for the ribbons annealed fo 5 min, indicative of the nearly complete removal of residual stresses which are produced during melt-quenching. As the annealing time increases, the coercivity increases and the shape of hysteresis loops transforms to round type and finally to sheared one at the longest annealing time of 210 min. These results may be explained by the formation of clusters with chemical shortorder and very fine crystallites (at the annealing time of 210 min), and the diffusion-induced stresses during the formation of the clusters. For the samples annealed for 5 min, very good dc properties of the squareness ratio, coercivity and maximum permeability are observed, but, rather unexpectedly, the initial permeability is found to be very low. These results are considered to be due to a simple domain structure consisting of very small number of $^{circ}$ domains.