The invention discloses ultra-low carbon ferrite high-silicon iron-based alloy and a manufacturing method thereof, belonging to the field of corrosion-resistant alloy. The ultra-low carbon ferrite high-silicon iron-based alloy comprises the following chemical components by weight percent: not more than 0.008% of carbon, 14.5%-18% of silicon, 0.3%-0.8% of manganese, less than 0.03% of sulfur and phosphorus, 0.01%-0.05% of RE and the balance of Fe and inevitable impurities. The alloy melting temperature is 1480-1520 DEG C, the discharge temperature is 1420-1460 DEG C, and rare earth ferrosilicon alloy is added into a ladle before discharge. Pouring is carried out when the molten iron temperature is 1280-1320 DEG C, a high-temperature annealing process is adopted, castings are hotly charged into a furnace and are heated to 750-800 DEG C, the temperature is kept for 12-24 hours, the furnace is cooled to less than 100 DEG C, and then the alloy is discharged. The room-temperature structure of the ultra-low carbon ferrite high-silicon iron-based alloy is a single-phase ferritic structure, the cutting effect on a ferritic matrix caused by graphite and the local corrosion caused by the potential difference of the matrix and the graphite are eliminated, and the mechanical property and corrosion resistance of the alloy are improved.