The invention discloses a construction method of an underground structure of a municipal building. The construction method comprises the following steps: conducting setting-out, specifically, conducting setting-out on a construction site according to a construction drawing; punching, specifically, punching on the edge of an excavated foundation pit; installing a soil retaining structure, specifically, inserting a reinforcement cage into a hole site, pouring concrete, forming soil retaining columns; excavating, specifically, in the process of foundation pit excavating, continuously installing the soil retaining structure, and connecting and reinforcing the multiple soil retaining columns; installing drainage structures, specifically, arranging the drainage structures in soil layers of different depths in a graded mode, and the multiple drainage structures communicate with one another; and installing foundation components, specifically, installing the foundation components in the foundation pit according to construction requirements. The foundation pit excavation environment is controlled through the soil retaining structure, the stability of the construction environment is guaranteed through the drainage structures, the quality of the components is guaranteed through the prefabricated foundation components, meanwhile, the construction efficiency is improved, the construction period is shortened, a construction plan can be smoothly completed, the benefits of a construction party are guaranteed, and the working intensity of constructors is reduced.