The present invention provides an improved process for the preparation of MgO of high purity >99% from salt bitterns via intermediate formation of Mg(OH).sub.2 obtained from the reaction of MgCl.sub.2 and lime, albeit indirectly, i.e., MgCl.sub.2 is first reacted with NH.sub.3 in aqueous medium and the slurry is then filtered with ease. The resultant NH.sub.4Cl-containing filtrate is then treated with any lime, to regenerate NH.sub.3 while the lime itself gets transformed into CaCl.sub.2 that is used for desulphatation of bittern so as to recover carnallite and thereafter MgCl.sub.2 of desired quality required in the present invention. The crude Mg(OH).sub.2 is dried and calcined directly to produce pure MgO, taking advantage of the fact that adhering impurities in the Mg(OH).sub.2 either volatilize away or get transformed into the desired product, i.e., MgO.