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It is well known that optical properties of Mg-Ni-H films can be tuned by hydrogen uptake from Mg-Ni-H and upload into Mg-Ni systems. In this work we show that modulation of optical properties of Mg-Ni-H can take place as a result of thermal processing in air as well. When reactively sputter deposited semiconducting Mg-Ni-H films are annealed at temperatures of 200 degrees C-300 degrees C in air, gradual band gap change from 1.6 to 2.04 eV occurs followed by change in optical appearance, from brown, to orange and, subsequently, to yellow. We investigate this phenomenon using optical and structural characterization tools, and link the changes to an atomic rearrangement and a structure reordering of the [NiH4]4-complex. The films are x-ray amorphous up to 280 degrees C, where above this temperature an increase in crystallite size and establishing of long-range order lead to a formation of the cubic crystalline phase of Mg2NiH4. Also, the results suggest that even though annealing was conducted in air, no oxidation or other changes in chemical composition of the bulk of the film occurred. Therefore, the band gap of this semiconductor can be tuned permanently by heat treatment, in the range from 1.6 to 2 eV.