The samples of Zn1-xNixO (x= 0.00 and 0.05) were prepared using coprecipitation method and annealed at different temperatures. The effect of Ni ion substitution on the structural and optical properties has been studied using X-ray Diffraction, UV-Visible, Photoluminescence and Magnetic measurements. XRD measurements demonstrate that all the prepared samples are wurtzite polycrystalline single phase in nature, ruling out the presence of any secondary phase formation. Ultraviolet visible measurements showed a decrease in band gap with the increase in annealing temperature and doping concentration. The PL data shows the red shift in all the samples and luminescence quenching with Ni doping. Compared to undoped ZnO, Ni doped ZnO showed room temperature ferromagnetism