The invention discloses an iron-based sub-nanometer magnetically soft alloy. The component expression of the alloy is FeaSibBcPdCeCufMg, wherein M represents one or several elements of Ti, Zr and Hf, and the subscripts of a, b, c, d, e, f and g are the atom percents of the corresponding elements, and the following conditions are met and include that a is larger than or equal to 78 and smaller than or equal to 86, b is larger than or equal to 2 and smaller than or equal to 9, c is larger than or equal to 4 and smaller than or equal to 10, d is larger than 0 and smaller than or equal to 5, e is larger than 0 and smaller than or equal to 3, f is larger than or smaller than or equal to 2, g is larger than 0 and smaller than or equal to 5, and the sum of a, b, c, d, e, f and g is 100. According to the alloy, a large number of alpha-Fe grains and atom clusters with the sub-nanometer dimension being lower than 5 nm are dispersed and distributed in a belt prepared through a single-roll melt fast quenching method, the belt has high saturation magnetic induction intensity, low losses, high permeability and other good soft magnetic properties. After the above quenched-state belt is subjected to heat treatment under proper conditions, a large number of alpha-Fe grains with the sub-nanometer dimension can be further precipitated, and the soft magnetic property is further improved. Due to the novel and unique microstructure, fast heat treatment is adopted in a crystallization technology for the series of alloys, and the industrial production efficiency can be obviously improved.