The Cluster Expansion formalism based on Density Functional Theory (DFT) simulation data has been applied for Al–Mg alloys with high accuracy (∼1 meV/atom). The atomistic simulations are used to model the Al–Mg phase diagram, phase boundaries and the initial solute clustering at different compositions and temperatures. The obtained free energies of formation for the FCC, HCP and γ-phase are in accordance with the experimental phase diagram. The calculations demonstrate the formation of Guinier-Preston (GP) zones of Al3Mg (L12 phase) within the Al matrix under varying conditions. The computed transition temperatures where the ordered structures dissolve are approximately 50K higher than experimental data. The free energy barriers associated with the formation of GP-zones increase as the solute (Mg) concentrations are reduced and the temperature is increased.