Spherical Ni(OH)2 powder coated with Co(OH)2 as raw material was mixed with LiOH to synthesize cathode material for lithium ion battery by using solid-state reaction. After sintered at temperature above 600 ℃, a solid solution with layer structure was formed. The result of XPS shows that it is a concentration gradient material with higher cobalt content at the surface, and the gradient decreases with increasing sintering temperature from 650 to 750 ℃. This new gradient material, called as Co-coated LiNiO2, exhibits excellent electrochemical performances for the cathode of Li-ion batteries in comparison with LiNiO2 and Co-doping LiNiO2. The consisting of 92% nickel and 8% cobalt was sintered at the temperatures between 650-670 ℃. Though initial discharge capacity could be increased with higher sintering temperature, the cycle life would be reduced.