The invention relates to multifunctional annular protective liquid for a sleeve for injecting fresh water into an oil field or reinjecting sewage into well oil and application thereof. The annular protective liquid comprises the following components in percentage by weight: 0.1 to 2 percent of amine compound, 0.05 to 0.5 percent of composite phosphate, 0.02 to 0.1 percent of composite quaternary ammonium salt cationic surfactant, 0.01 to 0.02 percent of sulfite and the balance of water. The annular protective liquid is applied to corrosion prevention, scale prevention and sterilization of carbon steel pipe columns of a water injection well, wherein the using amount of a single well is 7 to 15 tons; and the using concentration is 1,000 to 5,000 mg/l. In the annular protective liquid, the corrosion inhibition rate is over 95 percent; the scale inhibition rate is over 90 percent; the sterilizing rate is 100 percent; the change rate of the volume, the hardness and tensile strength of a packer rubber barrel before and after ageing is smaller than +/-2.5 percent; and the elongation rate of the packer rubber barrel before and after ageing is smaller than 5 percent.