The invention discloses an aluminum alloy composite material and a preparation method thereof. The aluminum alloy composite material is prepared from the following components in parts by weight: 89-93 parts of aluminum, 4-6 parts of iron, 3-6 parts of manganese dioxide, 3-5 parts of magnesium, 1-2 parts of titanium dioxide fibers, 1-1.5 parts of tin, 0.5-1 part of tungsten carbide, 0.05-1 part of zinc oxide and 0.05-0.1 part of graphene nanosheets. The invention also provides a method for preparing the material. The method comprises the following steps: (1) weighing the following components in parts by weight: 89-93 parts of aluminum, 4-6 parts of iron, 3-6 parts of manganese dioxide, 3-5 parts of magnesium, 0.05-1 part of zinc oxide, 0.05-0.1 part of graphene nanosheets and 0-0.5 part of vanadium pentoxide, heating to the temperature of 660-690 DEG C under an inert atmosphere, and uniformly mixing; (2) adding 0.5-1 weight part of tungsten carbide subjected to ball milling into the product in the step 1 under the inert atmosphere, and heating to the temperature of 1100-1200 DEG C; and (3) sequentially adding 1-2 weight parts of titanium dioxide fibers and 1-1.5 parts of tin into the product in the step 2 under the inert atmosphere, preserving the temperature at the temperature of 800 DEG C for 0.5-2 hours, removing the slag, and degassing, thereby obtaining the aluminum alloy composite material.