The invention discloses an environment-friendly dry powder coating and a preparation method thereof. The environment-friendly dry powder coating is composed of the following substances in weight percent: 5-20% of redispersible polymer latex powder, 20-40% of white cement, and calcium carbonate 20-45%, titanium dioxide 5-25%, diatomite 2-8%, bentonite 1-2%, cellulose ether 0.2-0.5%, defoamer 0.2-0.5%, coloring pigment 0-4%. Put each component material into the mixer according to the weight percentage, after mixing evenly, pack it to make the finished environment-friendly dry powder coating. At the construction site, it can be used as soon as the water is adjusted. Forming from the bottom to the surface at one time, saving time and process, without any volatile irritating substances, truly zero VOC, water scrubbing, smooth paint film, high hardness, high strength, aging resistance, and crack resistance. It is a substitute for traditional glue putty, Latex paint is a two-in-one new wall decoration product, which is widely used in the decoration of interior and exterior walls of buildings.