Described herein is the effect of optical annealing on the third-order non-linear optical properties exhibited by nanostructured Al-doped ZnO thin films. The samples were synthetized by an ultrasonic spray pyrolysis method. The optical annealing process was carried out by laser pulses at 532, 835 and 1064 nm wavelengths with, ps, fs and ps pulse duration, respectively. The optical non-linearity of the films was measured by the z-scan method with three different irradiations of excitation: 100 fs at 835 nm, 120 ps at 532 nm, and 150 ps at 1064 nm. The as-grown samples showed a saturable optical absorption that evolves into two-photon absorption transitions by a picosecond optical annealing phenomenon induced at 532 nm wavelength. Potential applications for developing optical encryption functions were considered.