Reducing Mg particles to nanoscale and doping with various catalysts are considered as efficient approaches for improving the hydrogen storage properties of Mg/MgH2. It has been established that doping Ni or Mg2Ni into nano-Mg/MgH2 through physical routes remarkably improves the hydrogen sorption kinetics. In this work, a Mg–Ni nanocomposite has been coprecipitated from a tetrahydrofuran (THF) solution containing anhydrous magnesium chloride (MgCl2), nickel chloride (NiCl2), and lithium naphthalide (LiNp) as the reducing agent. TEM observations reveal that Ni nanoparticles are distributed homogeneously on the surface of those larger Mg particles with sizes ranging from 10 to 20 nm in the nanocomposite. It is observed that γ-MgH2 phase appears when the nanocomposite is hydrogenated at temperatures below 225 °C. Pressure–composition–temperature (PCT) measurements reveal that the Mg–Ni nanocomposite has superior hydrogen storage properties over the pure Mg prepared using the same method. For instance, the Mg–Ni nanocomposite can absorb 85% of its maximum hydrogen capacity within 45 s at 125 °C, and a hydrogen capacity of 5.6 wt % can be obtained within 10 h at room temperature. In addition, the dehydrogenation temperature of the hydrogenated Mg–Ni nanocomposite is also much lower than that of the hydrogenated pure Mg. The hydrogenation and dehydrogenation enthalpies of the Mg–Ni nanocomposite are determined to be −70.0 and 70.7 kJ/mol H2, slightly lower than those for the reduced pure Mg. The excellent hydrogen sorption properties of the Mg–Ni nanocomposite can be attributed to the nanosize effect of Mg particles and the gateway effect of Mg2Ni formed in the composite after hydrogenation/dehydrogenation cycles.