The diffusion progress of grout is hindered by groundwater, which means the diffusion distance cannot reach the designed values required in engineering for water plugging or reinforcement. In this study, based on the generalized Darcy’s law and the continuity equation of steady column penetration, a column diffusion mechanism for Bingham fluid, considering the displacement effect of grout on groundwater, is proposed. This diffusion mechanism is then validated by the penetration grouting experiments that have been previously performed. The influences of the grouting pressure, groundwater pressure, water–cement ratio and penetration coefficient of porous media on the diffusion radius are analyzed. Based on the Comsol Multiphysics platform, a three-dimensional numerical simulation program for this mechanism is developed using computer programming technology. Numerical simulations of the penetration and diffusion morphology of Bingham cement grout in porous media are then carried out. The results show that the theoretical calculation values of diffusion radius obtained from this mechanism are closer to the experimental values than those obtained from the column penetration grouting theory of Bingham fluid, without considering the displacement effect. The results of this study can provide theoretical support for practical grouting engineering.