This study presents the development of a composite electrolyte for use in low-temperature (300–500 °C) Solid oxide Fuel Cells, focusing on a novel nanostructural design. The electrolyte comprises co-doped ceria (Ce0.85Sr0.075Sm0.075O2-δ, DCO) and barium cerate (BaCeO3, BCO), integrated into a unique nanostructural architecture. Initially, the constituent phases of the composite DCO and BCO are synthesized using a soft-chemical route separately, followed by their integration through liquid mixing technique in various compositions (90:10, 80:20, 70:30, 60:40, 50:50) of DCO:BCO in weight ratio. The composite structure is confirmed by X-ray diffraction, and refined the structural data by Rietveld refinement indicating a structural agreement with cubic and fluorite phases of DCO and BCO, respectively. Scanning Electron microscopy (SEM) and Energy Dispersive X-ray Analysis (EDAX) reveal a uniform distribution of two phases with fine size distribution below 50 nm. Transmission Electron microscopy (TEM) images illustrate the core-shell-like integration of the two phases. High-resolution TEM images indicate that the core consists of the DCO phase, while the shell is composed of the BCO phase. The microstructure of sintered pellets exhibits gas-tight densification, with grains dominated by the DCO phase and BCO phase dispersed along grain boundaries. The ionic conductivity of composite systems is extracted from Electrochemical impedance spectroscopy (EIS) studies, showing that DCO-BCO-40 exhibits the highest conductivity 1.132 × 10−3 Scm−1 @400 °C, which is higher than pristine DCO (0.34 × 10−4 Scm−1 @400 °C). Single cells fabricated using DCO-BCO-40 electrolytes deliver a power output of 280 mW cm−2 whereas pristine DCO showed 279 mW @500 °C. This study exhibits the potential of the core-shell-like nanostructural architecture of electrolytes in advancing Low-temperature solid oxide Fuel cell (LT-SOFC) technology and facilitating the transition toward sustainable energy systems.