Li-ion conductivity is one of the essential properties that determine the performance of cathode materials for Li-ion batteries. Here, using the density functional theory, we investigate the polaron stability and its effect on the Li-ion diffusion in layered LiCoO2 with different magnetic orderings. The localized Co4+ polaron appears in the magnetic configurations and sets the Li-diffusion barrier of ~0.34 eV. The polaron also migrates in the opposite direction to the Li-diffusion direction. On the other hand, the polaron does not form in the non-magnetic structure, and the Li diffusion barrier without the polaron is 0.21 eV. Although the existence of the polaron increases the diffusion barrier, the magnetically ordered structures are more energetically stable during the migration than the non-magnetic case. Thus, our work advocates the hole polaron migration scenario for Li-ion diffusion. Moreover, we demonstrate that the strong electron correlation of Co ions plays an essential role in stabilizing the Co4+ polaron.