In this work, we demonstrate that a novel post-treatment process that includes multi-step high-temperature annealing followed by high-power microwave oxygen plasma processing advantageously improves key properties for quantum technologies. We obtain single crystalline nanoparticles (NPs) of 100 nm diameter, presenting bulk-like inhomogeneous linewidths and population lifetimes (T1). Furthermore, a significant coherence lifetime (T2) extension, up to a factor of 5, is successfully achieved by modifying the oxygen-related point defects in the
NPs by the oxygen plasma treatment. These promising results confirm the potential of these engineered RE NPs to integrate devices such as cavity-based single photon sources, quantum memories and processors. In addition, our strategy could be applied to a large variety of oxides to obtain outstanding crystalline quality NPs for a broad range of applications.