Display omitted •The pristine MoS2 and Ni-MoS2 nanoflowers were synthesized by hydrothermal method.•The optimized Ni-MoS2 exhibited instantaneous response of 45.25% in 28 s.•The plausible mechanism explained the enhancement in sensing response.•The novelty of this work is fabricating room temperature gas sensor. In this work, we report the effect of nickel incorporation into MoS2 nanosheets for room temperature sensing of NO2 gas. Interestingly, the concentration of Ni (3, 5, 7 at.%) ions plays a vital role in enhancing the morphological and optical properties. The increased edge active sites in nickel incorporated samples play a vital role in high-performance gas sensing. 7 at.% of Ni incorporated MoS2 showed 115% enhancement for 200 ppm of NO2 gas molecules at room temperature, compared to pristine and other concentrations of Ni-incorporated sensors. The enhancement in the gas sensing performance was explained by the possible mechanism. In addition to this, the first principle calculations were performed to identify the influence of Ni-atom into the MoS2 matrix. The electronic structure of the material was tuned by the incorporation of Ni-atom into the MoS2. This was confirmed from electronic band structure, PDOS, electron density difference and Bader charge transfer analyses.