The present invention discloses an ultra-low shrinkage polyester industrial yarn and its preparation method. The ultra-low shrinkage polyester industrial yarn is prepared by subjecting a polyester to dissolution, washing and solid state polycondensation followed by spinning. The ultra-low shrinkage polyester industrial yarn has a dry heat shrinkage rate of 1.8±0.25% under test conditions of 177° C.×10 min×0.05 cN/dtex. The polycondensation catalyst consists of magnesium ethylene glycol and antimony ethylene glycol, has a small thermal degradation coefficient. The present invention reduces oligomers during polymerization, reduces thermal degradation during processing, and as a result the invention greatly reduces impurities and nucleating agent in the polyester, leading to an increase in the probability of homogeneous nucleation based on the reduction of heterogeneous nucleation. The dissolution and washing of polyester further decreases oligomer content, facilitating the growth of the grain size and the optimization of crystal perfection in the ultra-low shrinkage polyester industrial yarn.