Lithium-rich oxides are a promising class of positive electrode materials for next generation lithium-ion batteries, and oxygen plays a prominent role during electrochemical cycling either by forming peroxo-like species and/or by irreversibly forming oxygen gas during first charge. Here, we present Li-Fe-Te-O materials which show a tremendous amount of oxygen gas release. This oxygen release accounts for nearly all the capacity during the first charge and results in vacancies as seen by transmission electron microscopy. There is no oxidation of either metal during charge but significant changes in their environments. These changes are particularly extreme for tellurium. XRD and neutron powder diffraction both show limited changes during cycling and no appreciable change in lattice parameters. A density functional theory study of this material is performed and demonstrates that the holes created on some of the oxygen atoms upon oxidation are partially stabilized through the formation of shorter O-O bonds.i.e. (O2)n- species which on further delithiation show a spontaneous O2 de-coordination from the cationic network and migration to the now empty lithium layer. The rate limiting step during charge is undoubtedly the diffusion of oxygen either out along the lithium layer or via columns of oxygen atoms.