A biomedical degradable absorbable magnesium alloy is characterized in that the magnesium alloy is an Mg-Sr-Ca-Ag system magnesium alloy and comprises, by weight percentage, 0.1-8.0% of Sr, 0.1-5.0% of Ca, 0.01-2.0% of Ag and the balance Mg and unavoidable impurities. The invention further discloses a preparation method and application of the magnesium alloy. The magnesium alloy obtained in the invention not only has excellent biocompatibility, good mechanical property and good corrosion resistance, but also has a long-lasting antibacterial function and a function of promoting formation of newbones.