Nilsson started his coaching career in 1982 in
Bofors IK before moving on to
Modo Hockey which he coached for two seasons. He moved on to his former team
Kölner Haie for the 1985-86 season winning three German championships in a row 1986–88. He coached the team to third place in the
1989 European cup and runners-up in the bundesliga in 1991 before leaving Kölner in 1992. Nilsson stayed in Germany to coach
EC Hedos München. He led the team to become German champions during the 1993–94 season. Nilsson began his international coaching career when he coached
Team Switzerland for one season. He coached another German team,
Düsseldorfer EG which he led to win the German championship in 1996. He then took a break from hockey until 1999 when he signed on for
Djurgårdens IF for two seasons. Both seasons ended with Djurgården being Swedish champions. While coaching Djurgården, Nilsson was also head coach for
Team Sweden, a position he kept until 2004. He moved to Austria to coach
EC Salzburg in 2005. ==References==