In order to investigate the underlying mechanism of ground collapse resulting from pipeline damage and soil leakage, a comprehensive analysis was conducted using the DEM-CFD method. This study considered various factors of ground collapse, including the pipeline burial depth, water pressure, and radius of damage openings, while examining two distinct working conditions, a single layer of sand and an overlying layer of clay. The obtained results reveal a clear positive correlation between the particle loss rate and the magnitude of ground settlement. The collapse process can be delineated into three distinct stages based on the particle loss rate that are particle migration, rapid loss, and gradual expansion of the settlement trough. Among the considered factors, water pressure emerged as the primary influencer of the particle loss rate. In the case of a single sandy soil layer, the particle loss rate demonstrates an increasing trend with higher water pressure, larger damage radius, and shallower burial depth. For the overlying clay layer, the duration of the particle migration phase positively correlates with the thickness of the overlying clay layer, while displaying a negative correlation with water pressure and damage opening radius.