To handle the interactions between discrete medium and fluid in macro scale problems, the paper develops a fluid-structure coupling algorithm using smoothed particle hydrodynamics (SPH) method and discrete element method (DEM) and based on the principle of Darcy permeability test. A numerical model for landslide surge applying this coupling algorithm is developed by Fortran. The proposed procedure is used to simulate surge triggered by underwater block landslide, and numerical results are compared with the experimental data to verify the validity of the coupling algorithm. In addition, the generation, propagation and dissipation processes of surge induced by discrete medium landslide are also studied. Numerical maximum surge height is compared with the results of empirical formulas. Research shows that: simulated underwater block landslide surge is in good agreement with the tested results. In dealing with discrete medium landslide surge problems, the coupling algorithm can clearly reflect the process of surge formation, infiltration and deformation of landslide medium. Moreover the empirical formulas deduce different maximum surge heights. The process of discrete medium freely sliding along the inclined slope into water is closer to the vertical motion mode of Panjiazheng method, so does the numerical result.