The invention discloses a wet sludge incineration treatment method with condensing type drying relates to the environmental protection technology, a circulating fluidized bed incinerator is used for carrying out the incineration treatment on the wet sludge with water content of 60-90 percent, a dividing wall type heat exchanger is arranged behind a dust remover, flue gas and the wet sludge which are discharged by the incinerator are respectively introduced into the dividing wall type heat exchanger, thereby cooling the flue gas to dew point in the heat exchanger and condensing water vapor in the flue gas; the sensible heat which is released by utilizing the wet sludge to absorb the flue gas to reduce the temperature and the latent heat which is released by water vapor condensation increase the temperature, and water is evaporated and dried; the sludge after the drying is sent to a furnace chamber of the circulating fluidized bed incinerator for incineration at the temperature of 850-900 DEG C; exhaust gas which is exhausted by the dividing wall type heat exchanger and contains the water vapor and small amount of non-condensable gas is cooled, thereby condensing the water vapor and introducing the non-condensable gas to the upper part of the furnace chamber of the incinerator for incineration. The wet sludge incineration treatment method deeply utilizes waste heat of flue gas exhaust of the incinerator for pre-drying the wet sludge, so as to achieve the purpose of energy conservation.