In recent years, land subsidence and collapse accidents occur frequently in urban areas, and pipeline leakage is one of the main factors leading to such accidents. When the pipeline ruptures, if the fluid in the pipeline is gravity flow, the soil around the pipeline will be washed into the pipeline, which will eventually lead to settlement or ground collapse. In order to discuss the migration process of soil under the action of water flow during pipeline leakage, a joint numerical simulation method of computational fluid dynamics (CFD) and discrete element (DEM) program is proposed in this paper. In this method, the particle flow program (PFC3D) is used to model the strata, and the FLUENT module in ANASYS is used to calculate the groundwater flow field and introduce it into PFC3D, for joint calculation. By using this fluid-solid coupling method, the numerical modeling of the strata in the northern part of Shanghai, that is, 1.5 m thick clay soil layer in the upper part and 2.5 m thick sandy soil layer in the lower part, is carried out to study the influence of the crack size and crack position of the underground pipeline on the development of the underground cavity area and the ground collapse caused by the pipeline leakage. The numerical simulation results show that the larger the fracture size is, the larger the soil loss is, the wider the failure area of soil is, and the smaller the surface subsidence value is due to the existence of the upper clay soil layer. The failure area of soil extends from the fracture position to the upper part, and the damage area is much larger than that of the cavity area.