A novel and generic sol–gel method has been developed for the production of high purity metal oxide nanopowders using sodium alginate. This has been demonstrated successfully employing nickel oxide (NiO) as a model material in this instance. The results of this investigation indicate that the final particle size of ~20 nm can be obtained after calcination of the predried beads at 500°C for 3 h in ambient air. An insight into the calcination process has been obtained using simultaneous thermo-gravimetric analysis and differential scanning calorimetry (TGA/DSC) and high temperature X-ray diffraction (HT-XRD). Powder X-ray diffraction (XRD) confirms that the obtained samples are single phase cubic NiO powders with no trace of impurity. During the phase transformation, NiO + NiO2 have been found to coexist between 250°C and 350°C and a reaction scheme is proposed to account for this. The mean crystallite sizes calculated from XRD analysis using Rietveld refinement method is in good agreement with the morphological features observed using transmission electron microscopy (TEM). The NiO nanopowders produced in this study exhibit negligible strain as indicated using Rietveld refinement procedure. The XRD and TEM analyses indicate that there is a significant influence of calcination temperature and time on the particle size, which increases with increasing temperature and annealing time. This new sol–gel method is a simple, environmentally friendly, and nontoxic route for a large scale production of high purity single phase nanopowders in a cost-effective manner at significantly low temperatures. The process described in this study can yield 200 kg of NiO nanopowders per ton of dried Ni-ALG beads.