The invention relates to a casing milling joint device and a construction method thereof. The device comprises a vertically arranged pipe body penetrating inside, a waterstop vertically inserted ontothe side wall of the pipe body, a tie bar and cover bodies, wherein the top of the waterstop is aligned with the top of the pipe body, and opposite two side faces of the waterstop are fixed to the side wall of the pipe body through angle iron; the tie bar is fixed to the angle iron, and the other end of the tie bar is fixed to a reinforcement cage; and the cover bodies cover opposite two ends of the pipe body, and through holes where slurry seeps are formed in a spaced manner in the cover body at the bottom. The waterstop is arranged between adjacent two slot sections for preventing seepage. By forming the through holes in the cover body at the bottom of the pipe body, slurry can seep into the pipe body but concrete cannot enter into the pipe body. The weight of the pipe body can be increased as the slurry seeps into the pipe body, so that the pipe body is prevented from moving under buoyancy. The pipe body is fixedly connected to the reinforcement cage through the tie bar, so that thepipe body is prevented from moving in position.