Embedded Ge-rich nanostructures in SiO2 have technological interest in current opto-electronic devices. Here we report on rf-magnetron sputtered films with varying deposition parameters having a large impact on the long-term stability of the physical properties of the films related to the particular microstructure of the films. We observe efficient room temperature infrared photoluminescence (PL) from a (Er, Ge) co-doped SiO2 films where the PL and its intensity is correlated with the microstructure containing Ge-rich nanoclusters. Some preparation instances result in films, which have nanovoids and some which don’t have nanovoids. The PL from the former have been very strong while the annealing behaviour has the same characteristics as those without voids sputtered in Ar plasma with relatively less intensity; the PL intensity increases with annealing temperature and has a sharp maximum at 700 °C and then falls off. We have also studied the annealing time dependence of the films for annealing at 700 °C. The results indicates that several processes having an effect upon the luminescence occur simultaneously; The luminescence intensity as a function of annealing time can have both maxima and minima with details dependant upon the as- deposited structure and dependant upon when the annealing is performed after sputtering. The annealing behaviour is changed by storage over a 2 years period. The Er PL is a probe of the films microstructure. We have investigated the microstructure mainly with analytical transmission electron microscopy (TEM) and Fourier transform infrared (FTIR) spectrometry. We have compared the annealing behaviour for films with and without nanovoids in terms of PL intensity, microstructure and long term stability. Samples with nanovoids yields high PL intensity but are not beneficial for applications as they are correlated with long term instability. Samples have been annealed and measured systematically over a two years period. The effect of annealing has been found to be dependant on the as-deposited structure.