The present invention providing a system and installation method of wireless vehicle detection based on earth magnetic induction a signal collection module, a signal conditioning module, a MCU control module, a wireless communication module, a battery module and a signal receiver module includes. When the system is installed, firstly, a cylindrical cavity is cut in the road lane along the driveway; secondly, the adhesive is smeared on the interior of the cylindrical cavity; thirdly, a vehicle detection shell is provided, which includes a signal collection module, a signal conditioning module, a MCU control module, a wireless communication module, and a battery module inside; the whole lower part of the vehicle detection shell is inserted into the cylindrical cavity, then the adhesive is filled between the vehicle detection shell and the interior of the cylindrical cavity, which makes the lower portion of the vehicle detection shell firmly cemented in the cylindrical cavity; finally, a signal receiver module and an external processing module is provided, the external processing module is connected to the signal collection module for analyzing and processing the signals received from the signal collection module. The present invention owns many advantages including: the small volume, sensitive detection performance, the fast installation and the easy maintenance.