The invention relates to a high-toughness high-ductility zinc alloy and processing method thereof. The zinc alloy comprises the following components in percentage by mass: 0.025-0.05% of magnesium, less than 0.4% of copper, 3.8-4.3% of aluminum, less than 0.035% of ferrum, 0.02-0.1% of manganese, 0.05-0.8% of germanium, 0.02-1.5% of argentum, 0.05-2% of silicon and the balance of zinc; a smelting method of the high-toughness high-ductility zinc alloy comprises the following steps: adding above components in a smelting furnace in proportion, controlling the temperature of the smelting furnace within a range of 400-500 DEG.C, adding a fluxing medium after all components are dissolved into liquid, removing slag, and then removing zinc ash, pouring the solution into a die cavity for shaping. The high-toughness high-ductility zinc alloy and processing method thereof have beneficial effects of high yield, good plasticity, good corrosion resistance, small intercrystalline corrosion tendency and high size stability, the phenomena that the product is easy to break and fracture and the screw loose is easy caused by torsion are reduced.