Abstract: In nuclear reactor core neutron diffusion calculation, there are usually at least three levels of iterations, namely the fission source iteration, the multi-group scattering source iteration and the within-group iteration. Unnecessary calculations occur if the inner iterations are converged extremely tight. But the convergence of the outer iteration may be affected if the inner ones are converged insufficiently tight. Thus, a common scheme suit for most of the problems was proposed in this work to automatically find the optimized settings. The basic idea is to optimize the relative error tolerance of the inner iteration based on the corresponding convergence rate of the outer iteration. Numerical results of a typical thermal neutron reactor core problem and a fast neutron reactor core problem demonstrate the effectiveness of this algorithm in the variational nodal method code NODAL with the Gauss Seidel left preconditioned multi-group GMRES algorithm. The multi-level iteration optimization scheme reduces the number of multi-group and within-group iterations respectively by a factor of about 1-2 and 5-21.