Current recycling strategies for spent lithium iron phosphate (LiFePO4)-based batteries mainly concentrate on the extraction of the high-value lithium element via metallurgical processes, leaving the leached iron phosphate (FePO4) as trash. This poses serious environmental hazards and is a significant waste of materials. In this study, a two-step strategy is proposed to controllably convert leached LiFePO4 material into a high-performance cathode material (Na3.12Fe2.44(P2O7)2) for sodium-ion batteries, which includes an elemental compensation step and a subsequent intermediate phase-guided structural transformation step. The product features well-dispersed nanoparticles with a uniform carbon coating. Furthermore, systematic in situ characterization extracts full details for the above conversion in terms of both reaction mechanisms and crystallization kinetics. The product, when used as cathode material in sodium-ion batteries, delivers exceptional capacity retention (97.5% after 800 cycles at 1 C) and excellent rate performance (a capacity of 45.7 mA h g-1 at 30 C). This approach, which produces high-value emerging materials from waste materials, is economical, simple, and scalable, offering a sustainable solution for the efficient recycling of LiFePO4-based batteries.