In the construction of shield tunnels close to existing structures, the clay shock method is often introduced to assist in the control of ground displacement. The rheological and penetration diffusion properties of clay shock slurry have an important influence on the filling effect of the circumferential gap outside the shield shell. Based on the X-ray diffraction (XRD) test and viscosity test of clay shock slurry, the microscopic composition and rheological properties of the slurry were investigated. Based on the control equations of multiphase flow in porous media, a numerical model of diffusion of clay shock slurry in sandy soil was established, and the effects of water-powder ratio, formation permeability coefficient and grouting pressure on the diffusion performance were analyzed. The reliability of the numerical model was verified by combining with the seepage equation of Bingham fluid in sandy soil. The results show that the composition of the clay shock slurry is mainly quartz, albite, illite and feldspar. With the increase of the water-powder ratio of liquid A, the albite increases and illite content decreases. The plastic viscosity and yield strength of the clay shock slurry increase with the decrease in the water-powder ratio of fluid A. The coefficient of determination of Bingham's model for the rheological curve of the slurry is more than 0.95. The filling-diffusion stage of the clay shock slurry in the circumferential gap is about 25 s, and then the penetration-diffusion into the formation occurs. The penetration-diffusion rate is much smaller than the filling-diffusion. With the increase of the water-powder ratio of liquid A, the permeability coefficient of the formation and the grouting pressure, the clay shock slurry in the formation penetration distance will increase.