The invention provides a concrete panel reinforced retaining wall and a construction method of the concrete panel reinforced retaining wall. The concrete panel reinforced retaining wall comprises a surface layer and a geogrid reinforced wall body, and is characterized in that the surface layer is an integrated cast-in-place concrete panel, a concrete strip foundation is arranged at the bottom of the cast-in-place concrete panel, the geogrid reinforced wall body is a wrapped-face geogrid reinforced wall body, and the wrapped-face geogrid reinforced wall body and the integrated cast-in-place concrete panel are connected together through a reinforcing mesh and embedded anchor bars. The construction method includes the steps of foundation earth excavation, construction of the strip foundation on the base of a slope, construction of the reinforced retaining wall and construction of the cast-in-place concrete panel. The concrete panel reinforced retaining wall integrates advantages of a wrapped-face reinforced retaining wall and a panel-type reinforced retaining wall, and is high in integral rigidity, not prone to horizontal deformation and suitable for the conditions that the retaining wall is large in height and gradient and a slope surface faces water. The concrete panel reinforced retaining wall has the advantages of being high in stability, high in construction speed, good in anti-shake performance, wide in application range and the like.