The invention discloses a magnesium base composite hydrogen storage material. The magnesium base composite hydrogen storage material is of a core-shell structure, wherein the core is magnesium ultrafine powder particles and is placed inside the magnesium base composite hydrogen storage material, and the shell is made of transition metal and is placed on the outer layer of the magnesium base composite hydrogen storage material. The invention further discloses a preparation method of the magnesium base composite hydrogen storage material. The method includes the following steps that magnesium metal is melted and evaporated and then is cooled, so that the magnesium ultrafine powder particles are obtained; the magnesium ultrafine powder particles and transition metal kations undergo a replacement reaction, and the transition metal coats the magnesium ultrafine powder particles to be turned into the magnesium base composite hydrogen storage material. Raw materials for preparing the magnesium ultrafine powder particles are magnesium blocks, cost is low, an electric arc powder process and a replacement coating process are simple and controllable, meanwhile, the productive rate is high, and the magnesium base composite hydrogen storage material is suitable for large-scale industrial production; the magnesium base composite hydrogen storage material can form the good core-shell structure, and is good in hydrogen storage dynamics performance, stable in hydrogen absorption and desorption platform, small in delayed reaction, high in hydrogen absorption speed and low in hydrogen desorption temperature.