We demonstrated the InGaN/GaN-based light-emitting diodes (LEDs) with SiO₂ nanoparticles embedded in nanopillar GaN template. With the SiO₂ nanoparticles placed between the GaN nanopillars, subsequent overgrowth of GaN layer started only on the exposed tips of the nanopillars and rapidly switched to the lateral growth mode. This resulted in a high quality GaN layer "sitting" on the nanopillars and the layer of pores formed over the SiO₂ nanoparticles. For multi-quantum-well LEDs grown on top of such template, ~3 fold increase in optical output was observed compared to reference samples. The effect is attributed mainly to the improved light extraction efficiency due to additional scattering in the nanopillars-SiO₂-pores portion of the structure, also to the increased internal quantum efficiency caused by a decreased dislocation density and relaxed strain due to the GaN nanopillars.