The concentration luminescence quenching of the NIR emission of Yb3+ in nanocrystalline ZrO2 is studied. It is found that the quenching is dominated by cooperative energy transfer processes from isolated Yb3+ ions to Yb-Yb pairs (Yb dimers). The Yb dimer concentration depends on the crystallite phase and size, which on time depends on Yb concentration. An extended energy transfer model was developed to predict the IR and cooperative visible fluorescence emissions by taking in to account the crystalline phase, the nanocrystals size, and the geometrical construction of Yb dimers. Our model succeeds to fit simultaneously both experimental VIS and NIR emissions, and the corresponding interaction parameters are reported.