Sodium borohydride (NaBH4) hydrolysis is a promising approach for hydrogen generation, but it is limited by high costs, low efficiency of recycling the by-product, and a lack of effective gravimetric storage methods. Here we demonstrate the regeneration of NaBH4 by ball milling the by-product, NaBO2·2H2O or NaBO2·4H2O, with MgH2 at room temperature and atmospheric pressure without any further post-treatment. Record yields of NaBH4 at 90.0% for NaBO2·2H2O and 88.3% for NaBO2·4H2O are achieved. This process also produces hydrogen from the splitting of coordinate water in hydrated sodium metaborate. This compensates the need for extra hydrogen for generating MgH2. Accordingly, we conclude that our unique approach realizes an efficient and cost-effective closed loop system for hydrogen production and storage.