An Al-Mg-Nd-Sc aluminium alloy is composed of the following components (accounted by weight percent): Mg is 5.5 to 9.5 wt.%; Zn is 0.05 to 0.25 wt.%; Ti is 0.05 to 0.1 wt.%; Nd is 0.1 to 1.0 wt.%, Sc is 0.1 to 1.0 wt.% and the residual is Al. The method for preparing the novel rare earth aluminium alloy is as follows: adding vacuum smelted Al-Nd and Al-Sc master alloy during Al-Mg alloy smelting process. The invention has simple processing technique, rational component proportion. The Al-Mg alloy grain is obviously thinned under the function of alloying neodymium and scandium rare earth elements, so as to improve the intensity of alloy. Synchronously, Nd and Sc are added to form Al3Sc and Al16Mg7Nd particles which can obstruct dislocation movement and pin subgrain boundary, so that recrystallization of Al-Mg alloy is restrained. Al-Mg alloy is an important material applied to the aerospace field widely, so based on the invention, a series of novel rare earth Al-Mg alloy containing Nd and Sc can be developed for fields such as aerospace and automobile.