Thermal stability of cathode material in the charged state is an important aspect for the safety of rechargeable batteries. It is well known that layered LixCoO2 decomposes to a mixture of LiCoO2 and Co3O4 at elevated temperatures. However, not many experimental evidences exist on intermediate phases those may form during the decomposition. Using magnetic measurements we show that it is possible to distinguish between the spinels LiCo2O4 and Co3O4 and thereby follow the decomposition of LixCoO2. We characterize the magnetic behavior of thermally aged LixCoO2 (x = 0.98, 0.76, 0.55) with increasing annealing time. Our results reveal the appearance of magnetic ordering in the thermally degraded products. The detailed analysis illustrates that the formation of Co3O4 is preceded by the formation of a meta stable LiCo2O4 phase.