Wastewater from the electroless industry represents a potential danger to the environment and health, mainly due to its heavy metal content. In this study, nickel nanoparticles were synthesized through chemical reduction precipitation by using an electroless nickel plating waste and hydrazine sulfate as reducing agent. The aim of the present work is twofold. First we want to extract the metal from the aqueous medium, minimizing its content to levels allowed by environmental regulations. Second, we aim to valorize the residue by recovering the precipitated nickel to be applied as a solid phase in a magnetic fluid (MF). It is found that the present synthesis method using N2H4 as reducing agent, allowed us to minimize the Ni concentration in the aqueous waste in 97.49 %. The properties of the recovered Ni precipitate is compared with the Ni nanoparticles (NPs) obtained from a solution prepared with analytical grade nickel sulfate. The synthesized materials from both the waste (Ni-R) and analytical reagent (Ni-A) were characterized by comparing their chemical, physical, and morphological properties. In both cases, the Ni-R and Ni-A precipitates, spherical Ni NPs of 8–10 nm crystallite sizes are obtained, agglomerated in a bimodal size distribution centered at 174.6 and 383.4 nm, and a monomodal size distribution centered at 63.6 nm, respectively. Both Ni precipitated samples are ferromagnetic, but the Ni-R sample has a higher magnetic saturation of 40 emu/g compared to 8 emu/g of the Ni-A sample. The difference in the rheological behavior of both precipitates could be attributed to the presence of surface oxidation having a relatively less contribution in the case of the Ni-R particles due to the higher average size of the particles. The Fe content, probably coming from the nickel-plated parts in spent baths, is slightly higher in the Ni-R sample. Thus, the present work shows that it is possible to valorize an industrial Ni-based residue, by obtaining Ni precipitates that in magnetic fluids give even better results than those expected under more rigorous experimental conditions, i.e., in cases where the quality of the chemical precursors is usually a determining factor.