In recent years, land subsidence and collapse accidents occur frequently in urban areas, and the leakage of pipelines is one of the main factors leading to such accidents. When the pipeline breaks and the fluid in the pipeline is of gravity flow, the soil around the pipeline will be eroded into the pipeline, which will eventually lead to settlement or ground collapse. To explore the migration process of soil under action of water flow during pipeline leakage, the authors propose a Fluent and PFC combined computational numerical simulation method based on computational fluid dynamics (CFD) and discrete element (DEM) theory. This method mainly uses particle flow program (PFC3D) to model the formation. The FLUENT module in the ANASYS is used to calculate the groundwater flow field, which will be imported into the PFC3D to conduct the joint computation. Using this flow-solid coupling method, this paper conducts a numerical modeling of the stratigraphic situation in the northern part of Shanghai, and this domain is the upper 1.5 m thick clay layer and the lower 2.5 m thick sandy soil layer. Then the influences of the crack size and the crack position of underground pipeline on the development of underground cavity area caused by pipeline leakage and the ground collapse are explored. The numerical simulation results show that the larger the crack size is, the greater the soil loss is, the wider the soil disturbance area is in sandy strata, and the surface settlement will not demonstrate large value due to the existence of the upper clay soil layer. The soil disturbance area starts from the crack location and continues to expand. The higher it extends, the larger the disturbance area is, and the disturbance area is much larger than the cavity area.