I have Nikko Sky Ace RC helicopter, which had 02 Nos. of 9.6v  ni-mh 350 mah battery pack. Both are totally damaged at present.
So, where do I get the battery?
If I replace the same with li-po battery (11.1v 850 mah 25C or higher mah capacity cell) - is it safe?
Please, give useful suggestion.

Sure but 850 mah would be heavy for it.

If it's 3 cell

First I would like to thank you for giving your valuable suggestion.
In 2 cell Lipo, we get >7.4v and in 3 cell we get >11.1v.
But the Sky Ace cell capacity is 9.6v - so which cell Lipo pack should I choose?

It's better to explain if you post a photo

Yes!

2S would be a closer choice, because Fully charged it will be 4.2+4.2= 8.4 volts, that's closer to 9.6 volts, 

3s would be 12.6 fully charged which is on the dangerous side. 

And you may not discharge below nominal 3.85 volts per cell , 3.85 + 3.85 + 3.85 = 11.55 which is also higher than 9.6volts so not recommended.

And why are you replacing 350 mAh with 850mAh ?  That would be too heavy.

2S 350mAh to 450 mAh lipo should fly.

Getting a Lipo with a high C value would help you.

OK getting the suggested battery after lock down ends. Thanks for help, with regards.