Erbium doped waveguide amplifiers can be used in optical integrated circuits to compensate for signal losses. Such amplifiers use stimulated emission from the first excited state ((4) I (13/2)) to the ground state ((4) I (15/2)) of Er(3+) at 1.53 µm, the standard wavelength for optical communication. Since the intra-f transitions are parity forbidden for free Er(3+) ions, the absorption and the emission cross sections are quite small for such doped amplifiers. To enhance the absorption, Si nanoclusters can be embedded in silica matrix. Here we investigate the effect of the Si nanocluster on the Er(3+) emission using ab initio theory for the first time. We combine multi-reference configuration interaction with one-electron spin-orbit Hamiltonian and relativistic effective core potentials. Our calculations show that the presence of a polarizable Be atom at 5Ǻ from the Er(3+) ion in a crystalline environment can lead to an enhancement in the emission by a factor of three. The implications of this effect in designing more efficient optical gain materials are discussed.