A glycine-nitrate self-propagating high-temperature synthesis (SHS) was developed to produce composite MgO-Gd₂O₃ nanopowders. The X-ray powder diffraction (XRD) analysis confirmed the SHS-product consists of cubic MgO and Gd₂O₃ phases with nanometer crystallite size and retains this structure after annealing at temperatures up to 1200 ℃. Near full dense high IR-transparent composite ceramics were fabricated by spark plasma sintering (SPS) at 1140 ℃ and 60 MPa. The in-line transmittance of 1 mm thick MgO-Gd₂O₃ ceramics exceeded 70% in the range of 4-5 mm and reached a maximum of 77% at a wavelength of 5.3 mm. The measured microhardness HV0.5 of the MgO-Gd₂O₃ ceramics is 9.5±0.4 GPa, while the fracture toughness (K_IC) amounted to 2.0±0.5 МPa·m^1/2. These characteristics demonstrate that obtained composite MgO-Gd₂O₃ ceramic is a promising material for protective infra-red (IR) windows.