The invention provides a GaN-based light emitting diode chip with a nano prism structure on a side wall and a preparation method thereof, comprises an epitaxial wafer substrate and a multilayer structure prepared on the epitaxial wafer substrate, wherein the multilayer structure comprises a gallium nitride buffer layer, an n-type gallium nitride layer, a multiple quantum well active region, a p-type gallium aluminum nitride layer and a p-type gallium nitride layer in order from the lower layer to the upper layer. As that shape of the gallium nitride-based light emit diode chip is designed, theside wall of the gallium nitride-based light emitting diode chip are all m faces or most of the side wall faces are m faces and arc faces. The epitaxial layer is etched by tetramethylammonium hydroxide solution, and a nano prism structure is formed on the m-plane and arc-plane of the gallium nitride buffer layer and the n-type gallium nitride layer sidewall of the gallium nitride-based light emitting diode chip, thereby producing a surface roughening effect and improving the light extraction efficiency of the gallium nitride-based light emitting diode chip.