The invention discloses a silver based electrical contact material resistant to arc erosion. The material comprises following components in percentage by weight: 5 to 20% of Cu, 2 to 10% of TiB2, and70 to 93% of Ag, wherein the total percentage by weight is 100%. The invention also discloses a preparation method of the electrical contact material. The preparation method comprises following steps:weighing Ag powder, Cu powder and TiB2 powder according to a ratio, mixing the powder in advanced to obtain premixed powder; placing the premixed powder in a three dimensional powder mixing machine,mixing the premixed powder again to obtain mixed powder; filling obtained powder into a mould, pressing the powder to obtain a pressed blank; placing the pressed blank in a sintering furnace, carryingout sintering, and finally naturally cooling the blank in the furnace to the room temperature to obtain the AgCu-TiB2 electrical contact material. Through the aforementioned method, TiB2 is introduced into an Ag-Cu alloy electrical contact material, and the low cost AgCu-TiB2 electrical contact material is prepared by a powder metallurgic method and has the advantages of good thermal conductivityand electrical conductivity, excellent performance on resisting arc erosion and material transfer, and good mechanical properties.