A continuous wet ball-milling separation device has a cylinder, which has a feeding section, a shearing section, and a crushing section in sequence from top to bottom. The feeding section is located at the upper portion of the device, and is provided with a liquid inlet, a material inlet, and a material distributor. The shearing section is located in the middle of the device, and is internally provided with shearing blades. The crushing section is located at the lower portion of the device, and is internally provided with stirring rods and crushing balls, and a grading discharge module is provided at the bottom of the crushing section. A grading discharge module is used in the device and a continuous wet ball-milling separation method applying the device. The device implements continuous operations of material crushing and grading by means of the material distributor, wet shearing, wet crushing, and wet grading.