The invention discloses water-based cutting fluid for metal processing and a preparation method of the water-based cutting fluid. The cutting fluid mainly consists of a lubricating agent, a metal antirust agent, an anti-wear reagent at extreme pressure, a nonionic surfactant, a dispersing agent, an antifoaming agent and water, and the cutting fluid comprises the following components in percentage by weight: 8-12 percent of oleic acid, 1.8-2.5 percent of triethanolamine, 0.3-0.6 percent of boric acid, 0.2-0.5 percent of benzotriazole, 5-8 percent of sodium carbonate, 10-12 percent of polyethylene glycol, 0.2-0.5 percent of dodecylphenol polyoxyethylene ether (OP-10), 0.7-1 percent of glycine betaine, 0.5-0.8 percent of glycerin polyoxypropylene ether and the balance of water. According to the water-based cutting fluid disclosed by the invention, the problems that the conventional water-based cutting fluid is poor in antirust and lubricating performances, low in recycling period and harmful to the human and environment are solved, and the aims of improving the lubricating effect and the antirust performance, realizing harmlessness to the environment and a human body and reducing the production cost of metal processing are achieved by virtue of synthesis of polybasic esters.