The intermediate valence compound Ce2Ni2Mg absorbs irreversibly hydrogen when exposed under 1 MPa of H-2 pressure at room temperature. The resulting hydride Ce2Ni2MgH7.7 is stable in air and crystallizes as the deuteride La2Ni2MgD8 in a monoclinic structure (space group P2(1)/c) with the unit cell parameters a = 11.7620(2), b = 7.7687(2), and c = 11.8969(2) angstrom and beta = 92.75 degrees. The H-insertion in Ce2Ni2Mg induces a structural transition from a tetragonal to a monoclinic symmetry with an unit cell volume expansion Delta V-m/V-m approximate to 24.9%. The investigation of the hydride by magnetization, electrical resistivity, and specific heat measurements indicates a change from an intermediate valence behavior to a non-magnetic strongly correlated electron system. This transition results from a change of the coupling constant J(cf) between 4f(Ce) and conduction electrons induced by the hydrogenation.