The invention provides an industrial method for producing dispersion-strengthened iron-based materials at low cost and in large-scale. The industrial acid pickling waste solution is treated by spray roasting process after yttrium chloride is added. During the spray roasting process, the solution is atomized into fine droplets, the droplets are contacted with gas and dried into powders, which are heated in air to form metal oxides. The mixed powders of the metal oxides are reduced in hydrogen stream to obtain yttria dispersion-strengthened iron powders. High performance dispersion-strengthened iron materials are obtained by densifying the yttria dispersion-strengthened iron powders. The method has simple process and low cost, and is suitable for large-scale production due to the direct use of acid pickling waste solution from steel factory.