We report the microscopic mechanism of Na-ionic conduction and the role of the underlying crystal structure in the ionic conduction in the two-dimensional (2D) layered battery material Na2Co2TeO6 by combined neutron diffraction and impedance spectroscopy studies. Na2Co2TeO6 consists of Na+-ion layers in the ab plane, which are well separated by intermediate magnetic (Co/Te)O-6 layers along the c axis. Within the layers, the Na+ ions, resided in trigonal prismatic NaO6 coordination, and are distributed over three partially occupied crystallographic sites. Our temperature-dependent neutron diffraction study ensures that the crystal symmetry remains invariant over 300-723 K, with a nominal change (similar to 2%) in the unit cell volume. Further, the soft-bond valence sum (BVS) analyses of neutron diffraction patterns reveal 2D ionic conduction pathways within the Na layers. The impedance data have been analyzed to estimate the interlinked parameters, viz., dc ionic conductivity, ac ionic conductivity, and diffusivity, in addition to electrical modulus and dielectric constant, illustrating the microscopic mechanism of Na-ionic conduction. The conduction mechanism of Na+ ions involves a correlated barrier hopping (CBH) process. The conduction of the Na+ ions is found to be both thermally and frequency activated. A significant enhancement (similar to 10(3) times) of the conductivity has been observed upon increasing the temperature from 343 to 473 K. Further, our study demonstrates that the Na-ionic conduction of Na2Co2TeO6 is highly influenced by a disordered arrangement and partial occupation of Na ions within the 2D layers. The present comprehensive study, thus, provides an insight into the microscopic understanding of the ionic conduction properties and its intercorrelations with the crystal structure. The present work is significant for the progress of battery research, especially in the fabrication of highly efficient battery materials.