It is shown that the formation of water at the surface of protonated LiNbO3 can lead to the precipitation of disordered phases, causing undesirable degradation of the electro-optic properties of the material. These structural defects are observed to increase the conductivity, which leads to a slow build-up of space charges, believed to be a key reason for voltage bias drifts in LiNbO3 electro-optic devices. Annealing under a controlled partial pressure of water vapor is shown to minimize such damage to the crystal lattice. An additional reverse exchange process is proposed that further improves the stability of the crystal and its electro-optic properties. [ABSTRACT FROM AUTHOR]