This move was criticised by many Norwegian sports commentators, with some, especially Ivar Hoff, claiming it would assuredly mean Tromsø would be relegated.

However, Nilsen turned Tromsø poor form around, and after a good run in the autumn-part of the season, the team avoided relegation.

At the end of the 2005-campaign, Nilsen stepped down from his position as head coach of Tromsø, despite urges from many fans for him to stay longer.

In 2007, his first full season as Tromsø-manager, Nilsen led Tromsø to a comfortable 6th-place finish, just a few points shy of European qualification.

[3] In December 2013, Tromsø announced that Nilsen had signed a three-year contract as head coach of the club, with a clear ambition of promotion back to Tippeligaen after the 2014 season.