A system for resource recycling of sulfur dioxide includes a charcoal reduction furnace, a high temperature dust remover, a cooling separator A, a liquid sulfur tank, a cooling separator, a tail gas absorption tower, a gas stripping tower, a hypo reactor, a centrifuge, a mother liquor tank and a thickener. And a method for resource recycling of sulfur dioxide includes the following steps: (1) preparing elemental sulfur, (2) removing dust from a process gas containing gaseous sulfur, (3) separating elemental sulfur, (4) reabsorbing residual SO2 gas, (5) purifying sulfur powder, (6) preparing a slurry of cured hypo, (7) performing liquid-solid separation, and (8) preparing an absorption slurry. According to the method, SO2 gas is reduced into liquid sulfur and sulfur powder, and sodium thiosulfate is coproduced.