The magnetic properties of an $Fe_{87}Zr_{7}B_{5}Ag_{1}$(at.%) amorphous alloy have been investigated as a function of annealing temperatures to clarify its application potential as a core material for high-frequency use by adding a small amount of insoluble element of Ag. A new excellent soft magnetic material was developed. The amorphous alloy produced by relatively low temperature annealing at $T_{a}=400^{circ}C$ exhibited very high initial permeability$(mu_{i})$ of 288,000 at 1kHz and 2mOe, very low coercivity$(H_{c})$ of 15mOe and low core loss$(W_{c})$ of 50W/kg at 100kHz and 1,000G which is comparable with Co-based amorphous alloys, respectively. It is notable that the values obtained in the present study are the best magnetic properties among various kinds of Fe-based soft amorphous materials reported up to date. The reasons for the achievement of good soft magnetic properties are presumably due to the homogeneous formation of very fine $alpha$-Fe clusters with the size of 2~3nm in an amorphous matrix, which can be deduced from the increase of resistivity and the TEM observation. The very fine $alpha$-Fe clusters embedded in an amorphous matrix had a great influence on reduction of magnetostriction and refinement of magnetic domain.