In this study, SiO2/Al2O3/Er2O3 (SAE) nanopowders were fabricated by the Combustion Flame − Chemical Vapor Condensation (CF-CVC) technique with average primary particle sizes ranging from 10-30 nm. Fluorescence and lifetime measurements were made both on as-prepared powders, as well as heat treated powders, to compare the thermal annealing effects on optical properties. At an annealing temperature of 1000°C, the SAE became partially devitrified with extremely broad (FWHM ≈ 78 nm) and flat emission spectra, which is highly desirable for Wavelength Division Multiplexing (WDM) in optical amplifiers. The unique optical properties of the powders at this temperature, are attributed to the formation of a metastable phase consisting of an uniform nano-scale dispersion of a metastable intermediate SiO2 (Al,Er)2O3 phase in an amorphous SiO2 matrix. At higher heat treatments (1400°C), a dual-phase equilibrium structure was formed, consisting of a pyrochlore phase in a crystobalite matrix.