Changes in the structural, magnetic, and optical properties are observed during the synthesis of metallic nanoclusters fabricated on the surface of a thin silica layer by ion beam implantation of iron atoms. Iron atoms were implanted to the fluence of 10(16) cm(-2). The ion implantation depth in 400-nm thick SiO(2) film on a Si (100) substrate was 25 nm. The implanted samples were subsequently annealed for periods of seconds to hours at 1000 degrees C with Electron Beam Annealing. Ellipsometry and Rutherford Backscattering Spectrometry spectra were fitted with appropriate models to retrieve the optical characteristics, composition, and structure of the samples. Magneto Optical Kerr Effect measurements and SQUID magnetometry were performed to investigate the effect of the structural changes identified by TEM measurements on the superparamagnetic and magneto-optical properties of the samples during the annealing process. The changes in the Fe crystalline(core)/amorphous oxide(shell) structure and the position of the nanoclusters relative to the surface observed for small annealing durations are shown to enhance the Kerr effect resulting into high coercive field and high amplitude in the Kerr rotation and ellipticity.