Preparation and characterization of a novel biocompatible magnetic biomaterial having hyperthermia potential is reported in this study. Fe3+ and Ni2+ (2:1) cosubstituted hydroxyapatite nanoparticles were synthesized by simple wet precipitation method followed by freeze-drying which on heat treatment at 1150°C yielded the above mentioned biocompatible magnetic biomaterial composed of hydroxyapatite and β-tricalcium phosphate along with nickel ferrite. The product was characterized by X-ray diffraction, Fourier transform infrared spectroscopy, and transmission electron microscope along with composition analysis. The magnetic behavior was analyzed by vibrating sample magnetometer and biocompatibility was assessed by testing the toxicity on Hela cells using MTT assay. The hyperthermia potential of the material was studied using induction heating. The prepared material has the potential to generate sufficient heat that could be easily controlled by magnetic field parameters and amount of sample. Hence, it can be a potential candidate for making implantable thermoseed for hyperthermia treatment.