The optical study of Ge 20 Te 75 Bi 5 nano colloids is presented in this paper. Bulk chalcogenide glass was prepared by the well-known melt quenching method. Solution-based processing is proposed for nano colloid formation. Using the spin coating technique, optical-grade thin films are deposited on glass slides. The optical bandgap of films is estimated from absorbance spectra using the Tauc extrapolation method and Wemple and DiDomenico (WDD) model is used to determine the optical dispersion parameters. Tichy and Ticha approach has been employed to observe nonlinear refractive index (n 2 ). An increase in optical parameters and a decrease in optical bandgap with the increase in glass concentration may be attributed to cluster formation while dissolution.