The fly ash (FA) from the combustion of heavy oil in power stations is characterized by fine particles containing toxic metals. The sample utilized in this study was gathered from the dust precipitators of seven heavy-oil-consuming Iranian power plants. Substantial quantities of heavy metals, particularly vanadium, iron, and nickel, have been detected in the sample, indicating both its potential utility and hazard to the soil and groundwater. The harmful consequences of FA disposal on the environment have led to the adoption of recycling as a treatment approach in this study. The valorization of FA was investigated by producing nickel ferrite (NiFe2O4) and vanadium pentoxide (V2O5) through a novel approach using a combination of pyro-hydrometallurgical processes, which resulted in proposing a recycling closed-loop flowsheet. Roasting was first practiced to form NiFe2O4 by reacting the nickel and iron content of the FA. The NiFe2O4 showed a low dissolution against inorganic acids (H2SO4, HCl, and HNO3). The vanadium content of the FA showed a remarkable recovery in H2SO4 (91%) and HCl (95.6%), while the dissolution of Ni was limited to 16.85% and 17.5%, respectively. The produced NiFe2O4 acted well in response to the magnetic field, and its purity was further increased to 95–96% through a two-stage process consisting of grinding and magnetic separation. The nano-sized spherical NiFe2O4 with saturation magnetization of 34.66 and 30.82 emu. g−1 was obtained from H2SO4 and HCl residues, respectively. The dissolved vanadium was recovered as V2O5 via oxidation-precipitation in sulfate media and oxidation-ammonium precipitation in chloride solution. The purity of V2O5 in sulfate and chloride media was 93% and 98.5%, respectively. Finally, a life cycle assessment (LCA) study was performed on the suggested methods to track the ecological effects of extracting V and Ni from oil combustion FA. According to the performed LCA, H2SO4 was determined as the proper leaching reagent considering the environmental and technical aspects.