Nano-dimensional powder of iron cobalt cyanide hydrate in silica matrix (member of Prussian-blue family) was obtained using ferric chloride, cobalt chloride, potassium cyanide and silica in their dilute solution through coprecipitation method. The crystal structures and surface morphology of nanoparticles were characterized by the powder X-Ray diffraction (XRD) and transmission electron microscopy (TEM). The formation of compound Fe4 [Co(CN)6]3.16H2O was revealed by Fourier transform infrared (FTIR) spectroscopy. The magnetic properties of prepared samples were measured at room temperature using a Vibrating sample magnetometer (VSM). Effect of the thermal annealing on the phase decomposition and phase evolution of prepared samples for different temperature and time duration has been discussed. The results showed that the structure, phase and shape of the nanocrystallite are strongly influenced by the sintering temperature and time period. Results also showed that direct phase transition from Fe4 [Co (CN)6]3.16H2O to CoFe2O4 occurred at temperature 3000C (2h). The shape of embedded CoFe2O4 (a final product) in silica matrix is almost spherical and its average size ranges 15-25 nm.