Biodegradable plastics and biocompatible composites, generated from renewable biomass feedstock, are regarded as promising materials that could replace synthetic polymers and reduce global dependence on fossil fuel sources. Wood cellulose, the most abundant biopolymer on earth, holds great potential as a renewable biomass feedstock for the future. To unlock the entire scope of potential benefits of this feedstock, the wood components—namely cellulose, hemicellulose and lignin—need to be separated and processed individually. Current methods to separate wood components, such as Kraft pulping for example, suffer considerable drawbacks and cannot be considered environmentally benign. This work investigates the use of food-additive derived ionic liquids (ILs) for separating wood lignin, studying the influence of selected process parameters, such as extraction time, extraction temperature, IL moisture content, wood particle size, wood species, IL cation species, solvent composition, and IL recyclability on the lignin extraction efficiency. The lignin extract and the wood residues were characterised viainfrared spectroscopy, elemental analysis, thermogravimetric analysis, differential scanning calorimetry, X-ray diffraction, and gel permeation chromatography. An extraction efficiency of e = 0.43 of wood lignin was achieved in one gentle extraction step (T = 373 K, t = 2 h), and it was found that the presence of a co-solvent increased the extraction efficiency to e = 0.60. Gentle conditions during IL treatment did not decrease the crystallinity of the wood sample, and the extracted lignin had both a larger molar mass and a more uniform molar mass distribution, compared to commercially available Kraft lignin.