Hyperhoneycomb iridate β-Li2IrO3 is a three-dimensional analogue of two-dimensional honeycomb iridates, such as α-Li2IrO3, which recently appeared as another playground for the physics of Kitaevtype spin liquid. β-Li2IrO3 shows a non-collinear spiral ordering of spin-orbital-entangled J eff = 1/2 moments at low temperature, which is known to be suppressed under a pressure of ∼2 GPa. With further increase of pressure, a structural transition is observed at PS ∼ 4 GPa at room temperature. Using the neutron powder diffraction technique, the crystal structure in the high-pressure phase of β-Li2IrO3 above PS was refined, which indicates the formation of Ir2 dimers on the zig-zag chains, with the Ir-Ir distance even shorter than that of metallic Ir. We argue that the strong dimerization stabilizes the bonding molecular orbital state comprising the two local dzx-orbitals on the Ir-O2-Ir bond plane, which conflicts with the equal superposition of dxy-, dyz-and dzx-orbitals in the J eff = 1/2 wave function produced by strong spin-orbit coupling. The results of resonant inelastic x-ray scattering (RIXS) measurements and the electronic structure calculations are fully consistent with the collapse of the J eff = 1/2 state. A subtle competition of various electronic phases is universal in honeycomb-based Kitaev materials.