As organisms can form crystals only under ambient conditions, they demonstrate fascinating strategies to overcome this limitation. Recently, we reported a previously unknown biostrategy for toughening brittle calcite crystals, using coherently incorporated Mg-rich nanoprecipitates arranged in a layered manner in the lenses of a brittle star, Ophiocoma wendtii. Here we propose the mechanisms of formation of this functional hierarchical structure under conditions of ambient temperature and limited solid diffusion. We propose that formation proceeds via a spinodal decomposition of a liquid or gel-like magnesium amorphous calcium carbonate (Mg-ACC) precursor into Mg-rich nanoparticles and a Mg-depleted amorphous matrix. In a second step, crystallization of the decomposed amorphous precursor leads to the formation of high-Mg particle-rich layers. The model is supported by our experimental results in synthetic systems. These insights have significant implications for fundamental understanding of the role of Mg-ACC material transformation during crystallization and its subsequent stability.