Layered Li(M,Li)O-2 (where M is a transition metal) ordered rock-salt-type structures are used in advanced metal-ion batteries as one of the best hosts for the reversible intercalation of Li ions. Besides the conventional redox reaction involving oxidation/reduction of the M cation upon Li extraction/insertion, creating oxygen-located holes because of the partial oxygen oxidation increases capacity while maintaining the oxidized oxygen species in the lattice through high covalency of the M-O bonding. Typical degradation mechanism of the Li(M,Li)O-2 electrodes involves partially irreversible M cation migration toward the Li positions, resulting in gradual capacity/voltage fade. Here, using LiRhO2 as a model system (isostructural and isoelectronic to LiCoO2), for the first time, we demonstrate an intimate coupling between the oxygen redox and M cation migration. A formation of the oxidized oxygen species upon electrochemical Li extraction coincides with transformation of the layered Li1-xRhO2 structure into the gamma-MnO2-type rutile-ramsdellite intergrowth LiyRh3O6 structure with rutile-like [1 x 1] channels along with bigger ramsdellite-like [2 x 1] tunnels through massive and concerted Rh migration toward the empty positions in the Li layers. The oxidized oxygen dimers with the O-O distances as short as 2.26 angstrom are stabilized in this structure via the local Rh-O configuration reminiscent to that in the mu-peroxo-mu-hydroxo Rh complexes. The LiyRh3O6 structure is remarkably stable upon electrochemical cycling illustrating that proper structural implementation of the oxidized oxygen species can open a pathway toward deliberate employment of the anion redox chemistry in high-capacity/high-voltage positive electrodes for metal-ion batteries.