In 1989, when the Australian Baseball League was founded, the right-hander was picked up by the Gold Coast Cougars.
He batted at a .289/.352/.378 clip as a first baseman in the 1989–90 Australian Baseball League season, second on the team to brother Bob Nilsson.
The following year, he had a 5–4, 4.62 record for Daikyo, threw a one-hitter and helped the team to an ABL title.
The next year season was a bit of a low one for Nilsson as he was 0–4 with four saves and a 5.06 ERA, but did join with Kelly Wunsch and Cam Cairncross on a combined no-hitter.
His career in the Australian Baseball League totalled to a 17–14 record with 5 saves and a 4.57 ERA in 56 games.