The industrial recycling of spent lithium-ion batteries generates complex multi-contaminant streams containing oily pollutants, heavy metals, and recoverable lithium resources. Here, we propose a sustainable approach for concurrent contaminant degradation and lithium reclamation based on Fenton oxidation coupled with selective phosphate precipitation. The resulting Li3PO4 matches commercial battery-grade products, and the regenerated LiFePO4 exhibits excellent properties, demonstrating promising potential for scaled-up closed-loop recycling.