The invention relates to an easily-machined, low-cost and high-magnetostriction FeAl alloy strip as well as a preparation method thereof. The alloy strip comprises the following components in percentage by weight: 7.0-9.5% of Al, 0-0.1% of Mn, 0-0.1% of Si, less than or equal to 0.02% of C, less than or equal to 0.02% of S, less than or equal to 0.02% of P, less than or equal to 0.02% of Mo, less than or equal to 0.03% of Ce and the balance of Fe. The alloy is very low in price, is easy for cold machining, is high in curie temperature, resistivity and hardness, is relatively low in density (6.7g/mm<3>), is favorable in vibration and impact resistance, has favorable magnetic performance and relatively high saturation magnetostriction coefficient in the rolling direction and relatively wide temperature range, can replace expensive rear earth giant magnetostrictive materials as well as iron-cobalt and iron-nickel magnetostrictive materials in multiple fields, and can be widely applied to various high-precision instruments and meters.