Despite the attractive potential of Ni‐rich lithium layered oxides of LiNi1‐x‐yCoxMnyO2 as cathode materials for lithium ion batteries, the co‐precipitation preparation of their Ni‐rich hydroxide precursors of Ni1‐x‐yCoxMny(OH)2 remains challenging due to strict reaction conditions, discrepant solubility of metal ions, deficient theoretical guidelines and ammonia off‐gas disposal. Facing these, herein, we present a rationally‐designed modified co‐precipitation method to prepare Ni0.8Co0.1Mn0.1(OH)2 and its Ni‐rich cathode derivative for lithium ion battery. The modification involves four aspects. Firstly, end‐point prediction modelling based on thermodynamic equilibrium is devised to optimize the pH, concentrations of initial ammonia and metal sulphates feed. Secondly, ammonia solution is pre‐added into the reactor to simplify whole process. Thirdly, only one‐off inert gas supply is exerted to protect the solution from ambient air. Besides, an extra apparatus is introduced to absorb ammonia off‐gas. The Ni‐rich hydroxide prepared under optimized conditions is found with the almost designed stoichiometry and compactly aggregated near‐spherical secondary particles. Its lithated Ni‐rich derivative of LiNi0.8Co0.1Mn0.1O2 is obtained by lithiation of the hydroxide in air, which, as cathode material, demonstrates superior initial Coulomb efficiency of 86 % and reversible capacity of 196 mAh g−1 at 0.2 C, noticeable capacity retention of 95 % after 50 cycles at 1 C and decent cycling stability at 0.2 C. The prominent electrochemical performance can derive from the relatively low cation disorder and reasonable morphology of compact particles with considerable microspaces that favour lithium ion penetration. This method may provide enlightening guidance for the rational design on the synthesis of multicomponent electrode materials.