The magnesium alloy WZ21 was prepared by a combination of conventional casting, extrusion and heat treatment. The effect of various processing conditions on the final structure, mechanical and corrosion properties were investigated. Long-period stacking ordered (LPSO) phases were observed in the as-cast structure; however, they were at least partially dissolved during the extrusion or heat treatment. Thermally stable Mg24Y5 was observed in the structure as another dominant phase. The application of heat treatment to extruded products causes significant grain growth, and, therefore, the loss of mechanical properties. On the contrary, heat treatment performed before extrusion has a strong positive effect on the observed mechanical properties. In both cases, the thermal treatment positively affected the corrosion resistance of the prepared materials although the effect is more significant for material annealed before extrusion. After appropriate processing, the WZ21 alloy was characterized by the high value of the tensile yield strength of 337 MPa and really promising corrosion rate in simulated body fluid (SBF) (0.75 mm/year).