The effect of systematic substitution of Yb2O3 for Sc2O3 is studied on the phase stability and conductivity of 12Sc(2)O(3)-88ZrO(2) (12ScSZ) samples fabricated through solid-state reaction and pressureless sintering methods. Phase analysis via XRD, Raman spectroscopy and TEM confirmed the existence of a single cubic phase in all the tested compositions including 12ScSZ. The absence of beta-phase in 12ScSZ at room temperature is ascribed to the homogenous distribution of Se3+ inside the ZrO2 lattice. The oxygen-ion conductivity is measured through impedance spectroscopy technique from 650 degrees C to 350 degrees C in air. Even though co-doping of Yb2O3 leads to a decrease in the grain conductivity of 12ScSZ, the grain boundaries possess superior conductivity in co-doped compositions. Thus, the 1 mol% Yb2O3 co-doped 12ScSZ shows marginally better total conductivity (similar to 8.2 mS.cm(-1) at 650 degrees C) compared to 12ScSZ. The long-term ageing study performed at 600 degrees C for 550 h indicates a substantial conductivity loss (25% to 17%) in all the samples without any evidence of new phase formation. The conductivity degradation with time is attributed to the oxygen vacancy ordering around Sc3+ which is partially disturbed by co-doping of Yb2O3.