Single-ion magnets (SIMs) with large magnetic anisotropy are promising candidates for realization of single-molecule based magnetic memory and qubits. Creation of materials with magnetically uncoupled spatially separated SIMs requires dilution in a diamagnetic matrix. Herein, we report that progressive dilution of paramagnetic Co(ii) by diamagnetic Zn(ii) in the SIM ([CoxZn(1−x)(piv)2(2-NH2-Py)2], x = 1 ÷ 0) beyond a threshold of 50% reveals an abrupt structural change, where the distorted tetrahedral Zn coordination structure is superimposed on the remaining Co ions, which were initially in a distorted octahedral environment. Dilution-induced structure modification switches the magnetic anisotropy from easy-plane (D = 36.7 cm−1) to easy-axis type (D = −23.9 cm−1), accompanied by a fivefold increase of the magnetic relaxation time at 2 K. Changes of the static and dynamic magnetic properties are monitored by electron paramagnetic resonance spectroscopy and AC susceptibility measurements. Complementary quantum chemical ab initio calculations quantify the influence of structural changes on the electronic structure and the magnetic anisotropy. Thus, magnetic dilution hits two goals at once, the creation of isolated magnetic centres and an improvement of their SIM properties.