The invention discloses a novel composite electrode material of an iron base, a copper transitional layer and a surface nitride coating and a preparation method thereof. The novel composite electrode material of the iron base, the copper transitional layer and the surface nitride coating is formed through firstly coating pure copper with certain thickness on the surface of an iron-based material to serve as a transitional layer by using electroplating and brush electroplating technologies or chemical plating and sputtering plating technologies and depositing nitrides on the transitional layer by using a sputtering plating technology. Through using the iron-based material as the electrode material, the novel composite electrode material of the iron base, the copper transitional layer and the surface nitride coating, disclosed by the invention, has the advantages of good machining performance, good conductivity, high strength and low cost. A copper layer is plated on the surface of the electrode material to serve as the transitional layer to increase electrical conductivity and to increase film-based bonding strength of the surface nitride layer; the nitride layer on the surface has the advantages of corrosion resistance, high wear resistance, high strength, high hardness and lower resistance; the specific energy and specific power of an electrode can be greatly increased, the contact resistance is kept constant and electric energy consumption is stable and lower.