Combining interfacial interactions and layer-number tunability, the evolution of magnetism in low-dimensional diamagnetic systems like MoS₂ is indeed an interesting area of research. To explore this, Ni nanophases with an average size of 12 nm were encapsulated in MoS₂ and the magnetization dynamics were studied over the temperature range of 2–300 K. Surprisingly, the newly formed hybrid nanostructure was found to have a negative magnetization state with giant exchange bias that showed a reversible temperature-induced increase in both spin magnetic moment and coercivity. Density functional theory calculations proved an interfacial charge transfer interaction with a spin-polarized density of states. The magnetization state, along with giant exchange correlation among the magnetic clusters, suggested the possibility of robust thermomagnetic memory. The dc magnetization and relaxation, investigated with different measurement protocols, unveiled robust thermoremanent magnetization as a memory effect. The time-dependent magnetization study indicated that contributions from the negative magnetization state along with charge transfer induced spin states are responsible for the memory effect, which can be controlled by both temperature and external field.