A novel aqua regia system ITO etching solution is characterized in that the etching solution comprises hydrochloric acid, nitric acid, pure water and additives, wherein the additives comprise a nitrate compound, a chlorine-based compound and a surfactant. A preparation method of the etching solution comprises the following steps: 1, adding a highly-acidic ion exchange resin to hydrochloric acid and nitric acid respectively, stirring to mix, filtering out the highly-acidic ion exchange resin, and controlling or removing impurity ions in the hydrochloric acid and the nitric acid; 2, weighing the hydrochloric acid, the nitric acid, the chlorine-based compound, the nitro-compound, the surfactant and the pure water according to a ratio; 3, dissolving the chlorine-based compound, the nitro-compound and the surfactant in water, and uniformly mixing the resulting solution with the nitric acid and the hydrochloric acid; and 4, letting the mixture obtained in step 3 in a filterer, and filtering to obtain the ITO etching solution. The etching solution has the advantages of stability, moderate etching efficiency, and good etching efficiency.