We present a novel method of etching lithium niobate during the Ti diffusion process. A hypothesis for this etching process is explained by defining the kinetics of the Ti diffusion process as an electrochemical reaction. The Ti ions diffuse into the X cut LiNbO<sub>3</sub> crystal by swapping with Nb ions generating an electric field. Investigations were carried out by placing a bare LiNbO<sub>3</sub> wafer on top of the Ti patterned LiNbO<sub>3</sub> substrate during the diffusion process in a wet oxygen atmosphere. The built-in electric field during the Ti diffusion process is neutralised with the bare LiNbO<sub>3</sub> placed on top and is evident from the material removal that takes place from the top bare substrate and deposited on the bottom substrate were Ti is diffused. Hence the bare substrate is etched in the regions where Ti is present on the bottom substrate. Features can be arbitrarily defined (using Ti etching) and can have dimensions of 1 micron or smaller. Etch depths of the order of 1 micron have been demonstrated while maintaining smooth surfaces. The crystalline nature of the etched surface is analysed using X-ray diffraction techniques. The refractive index measurement and the surface roughness of the etched surface are also presented.