The invention relates to the field of metal materials, in particular to a high-strength high-plasticity magnesium alloy and a preparation method thereof. The magnesium alloy comprises the chemical components by mass percent: 6.1-9.5% of aluminum, 1.0-5.0% of tin, and the balance of magnesium and additional element/elements. The additional element/elements is/are one or more types of silicon, yttrium, strontium and stibium. The magnesium alloy comprises the following additional elements by mass percent: 0-3.0% of silicon, 0-3.0% of yttrium, 0-0.2% of strontium and 0-2.0% of stibium. The preparation method comprises the following steps: under the protection of gas, melting the preheated pure magnesium at a preset temperature, adding the preheated aluminum and the tin in a certain proportioninto the melt, keeping static at a constant temperature, heating to a higher preset temperature, adding the additional element/elements, keeping static at a constant temperature, evenly stirring, refining, removing the slag, and finally casting into ingots. The magnesium alloy has the advantages of high strength and high plasticity; and the preparation method has the advantages of simple technique, high reliability, easy popularization and application, and the like.