The present invention provides a powdery composite precursor, which comprises a core of a lithium transition metal oxide, and an aluminum hydroxide-based precipitate layer coated on the surface of the core, and a process to prepare the composite precursor. The preparation process comprises the formation of a water based slurry by dispersing lithium transition metal oxide powder in water, and a precipitation reaction of an aluminum salt solution with a base solution where the lithium transition metal particles act as seed particles, whereby a mechanically stable precipitate layer of homogeneous thickness can be achieved. The composite precursor can be converted into aluminum-containing, e.g., aluminum-doped, lithium transition metal oxide suitable for a cathode active material of lithium rechargeable battery by heat treatment.