A facile non alkoxide based sol–gel technique has been used to synthesize homogeneously distributed nanocrystalline 8 mol% yttria stabilized zirconia (YSZ) powder. The two steps of such powder preparation are gelation and thermal decomposition of metal-chelate complex in aqueous solution. Such nano powder was characterized by X-ray diffraction (XRD), Transmission electron microscopy (TEM), Field emission scanning electron microscope (FESEM), Fourier transform infra-red spectroscopy (FTIR) and BET surface area analyser. Upon calcinations at 600 °C, well crystallized nano-sized (10–15 nm) YSZ powder is obtained having spherical morphology and reasonably high surface area. The required ionic conductivity (0.107 S/cm) is achieved with 1200 °C sintered samples when measured at 1000 °C in air.