In view of the problem that the traditional inertial navigation system could not provide navigation information with high accuracy in polar region, the virtual North (called grid north in this paper) was proposed based on the parallel line of Greenwich meridian, and then the virtual orthogonal coordinate system based on grid north (called grid coordinate system in this paper) was established, which was taken as the spatial coordinate reference of inertial navigation in polar region to solve the mathematical theory problem of coordinate datum in the process of polar navigation parameter calculation. In order to verify the validity of the grid coordinate system, the error model was established. The simulation results showed that the established grid coordinate system was taken as spatial coordinate reference, which could solve the high-precision navigation information.