The invention provides a copper alloy bonding lead wire and a preparation method thereof. The copper alloy bonding lead wire takes a copper-based alloy as a matrix and the surface of the matrix is plated with a palladium layer; the copper-based alloy is prepared from the following raw materials: copper, silver, magnesium, gold and cerium; the preparation method of the copper alloy bonding lead wire comprises the following steps: S1, pre-treating raw materials; S2, preparing an alloy blank; S3, preparing an alloy rod; S4, carrying out primary drawing; S5, carrying out medium drawing; S6, carrying out final drawing; S7, carrying out surface washing: washing with an acid washing solution for the first time, washing with de-ionized water for the second time, washing with the acid washing solution for the third time and washing with an ethanol-water mixed solution with an ethanol-water mixed solution; S8, plating the surface with palladium; S9, carrying out fine drawing; S10, carrying out heat treatment; S11, rewinding and sub-packaging. The copper alloy bonding lead wire provided by the invention has the advantages of low production cost, good surface washing effect, small corrosiveness on a copper alloy and easiness of causing wire breaking.