Y₂O₃ ceramics is widely used as laser medium or optical window due to its excellent physical and chemical properties and high transparency in wide frequency band of 280 nm-8 μm. However, preparation of highly transparent Y₂O₃ ceramics still remains challenge due to its synthetic precursor and nano-powders difficult to meet the requirements. In this work, a spherical monodispersed and submicron-sized Y₂O₃ powder was prepared by a homogeneous precipitation method using yttrium nitrate and urea as raw materials. Structure, phase evolution and morphology of Y₂O₃ precursor and the calcined powder were studied by different methods. The synthesized particle precursor exhibits a sphere morphology with diamension around 330 nm, and Y₂O₃ powder calcined at 800 ℃ for 2 h shows spherical, well-dispersed and uniformed particles with dimension around 260 nm. Based on this spherical Y₂O₃ powder, transparent Y₂O₃ ceramics were fabricated by vacuum sintering at 1780 ℃ using 0.3% (in atom) Nb₂O₅ as sintering additive. The in-line transmittances of Y₂O₃ ceramics with thickness of 1 mm reach 76.9% at a wavelength of 1100 nm and 65.6% at a wavelength of 400 nm. In conclusion, this study provides a new promising method for preparing Y₂O₃ transparent ceramics with excellent properties.