The invention discloses a magnetic controlled-release fertilizer capable of improving soil water release and fertilizer maintenance capacity, and a preparation method thereof. The magnetic controlled-release fertilizer is prepared from following raw materials, by weight, 80 to 90 parts of weathered coal, 13 to 16 parts of magnesium sulfate, 20 to 22 parts of potassium chloride, 16 to 19 parts of tricalcium phosphate, 85 to 95 parts of fly ash, 230 to 250 parts of rape seed cake, 90 to 100 parts of rice chaff ash, 70 to 90 parts of iron pyrite ash, 36 to 38 parts of cassava starch, 5 to 8 parts of calcium acetate, 8 to 12 parts of a composite biological bacteria preparation, and an appropriate amount of water. According to the preparation method, raw materials, such as weathered coal and rice chaff ash, with excellent adsorbability are mixed with calcined ash with magnetization modification effect, adding of the magnetic controlled-release fertilizer into soil is capable of improving polymerization effect aggregate micelle in soil, realizing agglomeration of small particles in soil, obtaining relatively large microaggregates, reducing soil specific surface area, adhesion stress, and expansibility obviously, reducing soil volume weight, increasing soil interstices and water release and fertilizer maintenance capacity, and providing crop growth with beneficial environment.