Recovery of lithium (Li) compounds from various Li resources is attracting attention due to the increased demand in Li-ion battery industry. Current work presents an innovative route for selective recovery of lithium content in the form of lithium hydroxide monohydrate (LiOH·H2O) from discarded LIBs. Lithium carbonate (Li2CO3) with purity > 99% is recovered from black mass. The recovered Li2CO3 is then crystallised to LiOH·H2O by using calcium hydroxide (Ca(OH)2) as the base. The method comprises of: (i) pre-treatment of LIB black mass powder; (ii) selective extraction of Li content from black mass; (iii) crystallisation and solid–liquid separation to recover LiOH·H2O as final recovered product. A total of 0.1933 wt.% impurities comprising of Ca, Al, Cu and Fe were detected in the recovered product. Elemental analysis at each processing step was carried out using inductively coupled plasma-optical emission spectroscopy. Structural properties of the recovered materials are analysed by using X-ray diffraction, field emission scanning electron microscopy. Fourier-transform infrared spectroscopy spectrum of recovered product was found consistent with the formation of LiOH·H2O. The LiOH·H2O is successfully recovered from discarded LIBs with purity of 99.8%, which finds its potential use as secondary raw material in battery manufacturing, Li-based high temperature grease manufacturing, carbon dioxide scrubbing in space craft and submarines, etc.