The reaction of VOSO4 with 2-carboxyethylphosphonic acid (H-2-CEP) in presence of piperazine (PIP) produces a 3D inorganic-organic hybrid framework, {(H2PIP)(0.5) [VO (CEP)]center dot H2O) (1) with bidirectional channels occupied by the H2PIP cations and H2O molecules. The PO32- unit of CEP connects three V-IV centers to generate a ID ladder, which is further linked to four such ladders by the CEP linkers to form a 3D hybrid framework. The dehydrated framework, {(H2PIP)(0.5)[VO(CEP)]) (1') shows selective and gated adsorption behavior with H2O but not with methanol and ethanol. Very interestingly, when 1 is treated with an aqueous solution of LiNO3/NaNO3, the framework breaks down and results in a new polyoxovanadate (POV) cluster, [H-5 (H2PIP)(3)] [(V12V2O38)-V-V-O-IV(PO4)]center dot 8H(2)O (2) at pH approximate to 2.1. The cluster has been characterized by single-crystal X-ray diffraction, P-3i NMR, EPR, and magnetic studies. The temperature-dependent magnetic susceptibility measurement suggests antiferromagnetic ordering in 1 with T-N approximate to 3.8 K.