Structural and magneto-optical properties of Ni-doped amorphous AlN layers (a-AlN) deposited by radio frequency (rf) sputtering on Silicon (001) substrates were investigated. The as-grown material exhibits weak ferromagnetic behavior as evidenced by the magneto-optic Kerr effect (MOKE) measurement with Kerr rotation less than 100 μrad at room temperature regardless of the Ni fraction. The samples with a Ni concentration below 10 at.% show a weak but monotonically increasing MOKE signal with post-growth annealing temperature. A hundred-fold increase in the Kerr rotation value was observed for samples with Ni content exceeding 20 at.% after thermal annealing at 450°C in nitrogen; and the Kerr rotation value abruptly decreases above that temperature. The morphology of as-grown and annealed a-AlN:Ni films were characterized by small angle x-ray scattering and transmission electron microscopy. It was found that the as-deposited film contains nano-particles of different sizes with average diameters less than 30 nm. The size distribution of nano-particles in the thermally annealed a-AlN:Ni was studied as a function of annealing time and temperature. The results correlate well with those obtained from the MOKE measurements.