Nanopores in insulating solid state membranes have recently emerged as potential candidates for sorting, probing and manipulating biopolymers, such as DNA, RNA and proteins in their native environment. Here a simple, fast and cost-effective etching technique to create nanopores in diamond membrane by self-assembled Ni nanoparticles is proposed. In this process, a diamond film is annealed with thin Ni layers at 800-850 degrees C in hydrogen atmosphere. Carbon from the diamond-metal interface is removed as methane by the help of Ni nanoparticles as catalyst and consequently, the nanoparticles enter the crystal volume. In order to optimize the etching process and understand the mechanism the annealed polycrystalline and nanocrystalline diamond films were analyzed by X-ray photoelectron spectroscopy (XPS), and the gas composition during the process was investigated by quadrupole mass spectrometer. With this technique, nanopores with lateral size in the range of 15-225 nm and as deep as about 550 nm in diamond membrane were produced without any need for lithography process. A model for etching diamond with Ni explaining the mechanism is discussed.