The Ni and Y co-doping effect on the structural stabilities and dehydrogenation properties of destabilized MgH₂ was studied by first-principles calculations. Ni and Y dopants prefer to occupy the Mg3 and Mg2 positions due to the minimal total electronic energy. The formation enthalpy was used to evaluate the stability of the doped MgH₂ systems. Most Ni and Y co-doped MgH₂ systems are more stable than Ni single-doping. In particular, the case of x = 20% (Mg₈Ni₈Y₂H₃₆) exhibits the highest stability. During the dehydrogenation process, the Ni and Y co-doped MgH₂ system possesses promising dehydrogenation properties compared with pure Ni doping, which can be attributed to the relatively lower hydrogen desorption enthalpies. The electronic structures show that hybridization of the dopants with Mg and H atoms can strongly weaken the Mg–H interactions, which effectively improve the dehydrogenation properties of the Ni and Y co-doped MgH₂ system.