The defects on the foundation pit retaining structure in the water-rich sand layer are easy to cause lateral water and sand leakage, resulting in engineering disasters. A visual test device for simulating lateral leakage failure of the foundation pit is developed. The effects of water head and sand relative density on sand flow rate and leakage failure surface were studied. The results show that: When a lateral leakage hole emerged in the foundation pit, water and sand first leaked out from the hole, transmitted to the surface, and gradually expanded to both sides of the periphery to form a V-shaped failure surface, and finally achieve leakage deformation stability, forming a flow failure zone and stability zone around the hole. As the water head increased from 0.04 m to 5 m, the sand mass flow rate and water mass flow rate increased 3.3 times and 3.5 times respectively; the more unstable the sand failure surface at the leakage outlet resulted, the damage surface angle was reduced from 33.5° to 32.2°. As the relative density increased from 0.5 to 0.9, the sand mass flow rate and water mass flow rate decreased by 48% and 64% respectively; the more easily the sand failure surface at the leakage outlet reaches the stable state, the failure angle increased from 32.2° to 34.7°.