The invention provides a separation method of methane from coal bed methane-air mixture and a system thereof. The separation method includes a step of performing a hydration reaction to the coal bed methane-air mixture and collecting methane-rich gas. A hydration reactor for the hydration reaction has a structure that a chamber in the hydration reactor is divided into an inlet section, a throat tube section and a stable section in the flowing direction of a hydrate work fluid, wherein the flow area in the throat tube section is less than that of the inlet section and the stable section. A gas inlet is formed in the side wall corresponding to the throat tube section in the chamber of the hydration reactor. By means of the separation method, a step of compressing and pressurizing the coal bed methane-air mixture when the methane is separated from the coal bed methane-air mixture through a hydrate separation method in the prior art, thereby avoiding risk of explosion during compressing and high-pressure flowing processes of the coal bed methane-air mixture. The method is safe in operation and is excellent in practical industrial application availability.