The present invention provides a composition and method of producing nano-composite powder consisting essentially of hydroxyapatite (HA) and zirconium oxide (ZrO2). The method comprises the steps of reacting orthophosphoric acid with calcium hydroxide to form a HA suspension, adding ZrO2 suspension to the HA suspension to form a composite feedstock, and subjecting the composite feedstock to Radio Frequency (RF) Plasma Spraying to form the nano-composite powder. Quantity of the zirconium oxide suspension added is in the range of 10 to 40 weight % of the composite feedstock. The nano-composite powder comprises 60-90 wt % calcium hydroxyapatite, 10-40 wt % zirconium oxide and traces of calcium phosphate.