The existing magnetic target localization methods are greatly affected by the geomagnetic field and exist approximation errors. In this paper, a two-point magnetic gradient tensor localization model is established by using the spatial relation between the magnetic target and the observation points derived from magnetic gradient tensor and tensor invariants. Based on the model, the equations relating to the position vector of magnetic target are constructed. Solving the equations, a new magnetic target localization method using only a two-point magnetic gradient tensor and no approximation errors is achieved. To accurately evaluate the localization accuracy of the method, a circular trajectory that varies in all three directions is proposed. Simulation results show that the proposed method is almost error-free in the absence of noise. After adding noise, the maximum relative error percentage is reduced by 28.4% and 2.21% compared with the single-point method and the other two-point method, respectively. Furthermore, the proposed method is not affected by the variation in the distance between two observation points. At a detection distance of 20 m, the maximum localization error is 1.86 m. In addition, the experiments also verify that the new method can avoid the influence of the geomagnetic field and the variation in the distance, and achieve high localization accuracy. The average relative error percentage in the y-direction is as low as 3.78%.