Nanocrystalline 3 mol% yttria-tetragonal zirconia polycrystal (3Y-TZP) ceramic powder containing 5 wt.% Al2O3 with 64 m2/g specific area was synthesized through precipitation method. Different amounts of Co (0–3 mol%) were introduced into synthesized powders, and ceramic materials were obtained by heat treatment in the air for 2 h at 1350–1550 °C. The influence of Co addition on the sintering temperature, phase composition, microstructure, mechanical and biomedical properties of the obtained composite materials, and on the resolution of the digital light processing (DLP) printed and sintered ceramic samples was investigated. The addition of a low amount of Co (0.33 mol%) allows us to decrease the sintering temperature, to improve the mechanical properties of ceramics, to preserve the nanoscale size of grains at 1350–1400 °C. The further increase of Co concentration resulted in the formation of both substitutional and interstitial sites in solid solution and appearance of CoAl2O4 confirmed by UV-visible spectroscopy, which stimulates grain growth. Due to the prevention of enlarging grains and to the formation of the dense microstructure in ceramic based on the tetragonal ZrO2 and Al2O3 with 0.33 mol% Co the bending strength of 720 ± 33 MPa was obtained after sintering at 1400 °C. The obtained materials demonstrated the absence of cytotoxicity and good cytocompatibility. The formation of blue CoAl2O4 allows us to improve the resolution of DLP based stereolithographic printed green bodies and sintered samples of the ceramics based on ZrO2-Al2O3. The developed materials and technology could be the basis for 3D manufacturing of bioceramic implants for medicine.