The invention relates to a flame-retardant Mg alloy doped with Gl and Sr and a preparation method thereof. The alloy is made from Mg, Al, Zn, and Mg-Mn intermediate alloy as raw materials, Al-Gl intermediate alloy and Al-Sr intermediate alloy as fire retardants and Al-Sr intermediate alloy as an agent for enhancing mechanical property of the alloy. The preparation method is carried out in a vertical smelting furnace, and comprises smelting at 710 plus or minus 5 DEG C, refining at 760 plus or minus 5 DEG C, standing, casting at 700 plus or minus 5 DEG C, adding smelting and refining agents, incubating at a constant temperature, standing to obtain a molten liquid of flame-retardant Mg alloy, casting in a die, cooling, cutting and shaping to obtain flame-retardant Mg alloy ingot. During the smelting process, the addition of Al-Gl intermediate alloy and Al-Sr intermediate alloy can efficiently prevent the combustion and oxidation of Mg alloy and simultaneously improve the mechanical property of Mg alloy. This method has the advantages of rigor process, reasonable formation, short process flow, less environmental pollution, and good compactness and uniformity of metallurgical structure of Mg alloy ingot product. The average crystal grain of the product is less than or equal to 90 micron, the tensile strength reaches 200 MPa, and the impact ductility reaches 15J/cm<2>.