The invention provides a low-shrink alkali slag cement composition and a preparation method thereof. The low-shrink alkali slag cement composition is characterized by being prepared from 80-90 percent of granulated blast furnace slag, 4-10 percent of sodium hydroxide, 4-12 percent of light calcined magnesia and aluminum stearate, wherein the aluminum stearate accounts for 1-4 percent of the totalmass of the sodium hydroxide and the light calcine magnesia. The preparation method comprises the following steps of: crushing the sodium hydroxide into powder through a crusher, wherein the size of the powder is 0.08mm and the screen residue weight through a square hole screen is 0.5-2 percent; pouring the sodium hydroxide powder, light calcined magnesia powder and the aluminum stearate into a heatable high-speed stirrer; stirring for 4-5min at a temperature of 160-200 DEG C and naturally cooling to room temperature to prepare sodium hydroxide-magnesia composite powder coated by the aluminumstearate; and sequentially pouring the granulated blast furnace slag powder and the sodium hydroxide-magnesia composite powder coated by the aluminum stearate into a closed stirrer, and evenly stirring to obtain the low-shrink alkali slag cement composition. The low-temperature alkali slag cement composition stirred with water has the initial settling time of more than 45min, the final settling time of not more than 240min, high strength after hardening, and small shrink.