In the present work magnesium nanoparticles (MgNPs) and Mg@Ni core-shell nanoparticles has been synthesized first time by microemulsion technique. The magnesium nanoparticles (MgNPs) as core and Ni as shell significantly decrease the desorption temperature. The Ni shell and ionic liquid to surfactant ratio played a vital role in the micelle size controlling parameters. The results obtained through SEM and TEM observations reveal that the synthesized nanostructures and core-shell materials were distributed homogeneously and confirmed the Ni shell encapsulated the magnesium particles with size ranging from 9 to 15 nm. The pressure composition temperature (PCT) results show that Mg@Ni core-shell nanoparticles absorbed more hydrogen as compared to pure magnesium nanoparticles (MgNPs) using the same method. The Mg@Ni core-shell nanoparticles at 125 °C in 45 s could absorb 85% of its maximum hydrogen, additionally the dehydrogenation temperature of hydrogenated pure magnesium nanoparticles (MgNPs) were much higher than Mg@Ni core-shell nanoparticles. The dehydrogenation and hydrogenation enthalpies of Mg@Ni core-shell nanoparticles were slightly lower than the pure magnesium nanoparticles (MgNPs). Due to the nano size effect the synthesized core-shell materials i.e. Mg@Ni core-shell nanoparticles have excellent hydrogen storage properties after the hydrogenation and dehydrogenation cycle.