A new approach to recover metal values from spent lithium-ion batteries with a simple and environmentally friendly method is investigated. Two stages of water washing of the mixed black powder resulted in satisfactory separation of cobalt and lithium. Lithium in the wash liquor is precipitated using saturated sodium carbonate solution. Cobalt oxide in the residue is purified by removing organic matrix through roasting followed by dilute acid washing. The purities of the products obtained during the processes are analyzed by Microwave Plasma-Atomic Emission Spectrophotometer and confirmed from X-ray diffraction analysis. The overall process is safe, economic and can be scaled up for commercial production. Based on the process steps involved, a flow sheet is proposed for industrial application.