A discrete-time output error (OE) model identification method is proposed for industrial integrating processes with time delay, to facilitate the discrete-time controller design and implementation in sampled systems. By subtly introducing a differential filter to the input excitation, an open-loop identification test can be performed for such a process while complying with the output limit. Correspondingly, the parameter estimation is equivalently transformed to identify a stable type OE model with time delay. A recursive identification algorithm is developed to simultaneously estimate all the model parameters including the integer delay, and a linear interpolation of the input excitation is given for the recursive computation to guarantee consistent estimation. The convergence of parameter estimation is analyzed with a proof. An illustrative example is used to demonstrate the effectiveness of the proposed method.