Nilsson supervised his first Allsvenskan match in 1992 and became a FIFA certified referee in 1994.

[2][3] He was also a regular choice for leading international matches in the 1990s, for instance at the 1997 FIFA World Youth Championship.

[9] After his career as a referee Nilsson remained in football and served as the chairman of Bohusläns Fotbollförbund until 2012.

Nilsson was also active as a member of the boards of directors at the Swedish Football Association before he was elected president of the association on 23 March 2012 after Lars-Åke Lagrell resigned.

[10] On 28 May 2023, he was appointed chairperson for the Sveriges Riksidrottsförbund, succeeding Björn Eriksson.