Yb:CaF2 transparent ceramics represent a promising laser gain medium for ultra-short lasers due to their characteristics: low phonon energy, relatively high thermal conductivity, negative thermo-optical coefficient, and low refractive index. Compared to single crystals, Yb:CaF2 ceramics offer superior mechanical properties, lower cost, and it is easier to obtain large-sized samples with proper shape and uniform Yb3+ doping at high concentrations. The combination of air pre-sintering and Hot Isostatic Pressing (HIP) emerges as a viable strategy for achieving high optical quality and fine-grained structure of ceramics at lower sintering temperatures. The properties of the powders used in ceramic fabrication critically influence both optical quality and laser performance of Yb:CaF2 ceramics. In this study, the 5 atomic percentage (at.%) Yb:CaF2 transparent ceramics were fabricated by air pre-sintering and hot isostatic pressing (HIP) using nano-powders synthesized through the co-precipitation method. The co-precipitated powders were optimized by studying air calcination temperature (from 350 to 550 °C). The influence of calcination temperature on the microstructure and laser performance of Yb:CaF2 ceramics was studied in detail. The 5 at.% Yb:CaF2 transparent ceramics air pre-sintered at 625 °C from powders air calcined at 400 °C and HIP post-treated at 600 °C exhibited the highest in-line transmittance of 91.5% at 1200 nm (3.0 mm thickness) and the best laser performance. Specifically, a maximum output power of 0.47 W with a maximum slope efficiency of 9.2% at 1029 nm under quasi-CW (QCW) pumping was measured.