Hypoeutectic composition of Al-Mg alloy binary system was established as a stabilized composition for production of Al-Mg alloy nano powders for fabrication of solid propellant. Nano powder of hypoeutectic Al-Mg alloy was prepared by high voltage Electrical Wire Explosion Process (EEW) under inert Argon and Helium gas environment with chamber pressure of 25 kPa and 50 kPa. The thin wires for explosion were prepared by Electrical Discharge Machining (EDM) process from Al-Mg alloy cast. XRD analysis of powder produced and alloy cast was performed to compare the phases present. Scanning Electron Microscope (SEM) images were taken for studying the shape and structure of the nano powder particles and Energy Dispersive Analysis of x-rays (EDX) was performed for affirming elemental composition of alloy powder. Morphological characteristics of nano powders were analyzed by Transmission Electron Microscope (TEM) images and the particle diameter was found ranging from10 nm to 90 nm. Highly magnified TEM images were obtained to analyze the formation of various phases in the powder. Thermo-Gravimetric Analysis and Differential Scanning Calorimetry (TGA-DSC) measurements were made to substantiate the low melting nature of Al-Mg alloys predicted by Al-Mg binary phase diagram with an offset temperature of melting 460 °C, which is much closer to the eutectic melting point (450 °C) of Al-Mg binary metal alloy. With the improved ductility of hypoeutectic alloys enabling better machinability to produce thin wires than eutectic composition, the results suggests hypoeutectic nano powders can be used as replacement for nano aluminium as energetic element in solid propellants. © 2019 IOP Publishing Ltd.