The invention provides a high-power high-capacity lithium ion battery and a preparation method thereof. by changing the structure of electrodes and placement position of current collectors in existing lithium ion battery, an electrode material layer is arranged between two layers of current collectors to form an electrode, and positive and negative current collectors are respectively positioned at two sides of a diaphragm instead of being positioned inside the electrode material layer. According to the structure, the battery electrode layer is close to a reaction area for porous current collector, and there is always a low-internal-resistance area. Thus, the battery can meet requirement of instantaneous high-power operation. Meanwhile, thickness of the electrode layer can be greatly increased, and the requirement of a battery on large capacity can be met. Therefore, the contradiction that the increase of battery capacity leads to instantaneous power coastdown of a battery is effectively solved. As the porous current collector is arranged between the electrode layer and the diaphragm, direct contact between the electrode material layer and the diaphragm is avoided, the internal short-circuited risk caused by positive and negative active particles and a nano-conducting layer entering the diaphragm is reduced, and safety of the battery is raised.