Modifying the optical properties of rare earth doped phosphate glasses in a tunable fashion via the embedment of magnetic nanoparticles (NPs) is challenging for magneto-optic devices. Glasses with compositions (69-x)P2O5-30ZnO-1Er2O3-(x)Fe3O4, where x = 0 to 1.5 mol% are prepared by conventional melt quenching method. The Fe3O4NPs concentration dependent density, molar volume, refractive index and optical properties are determined. Density and molar volume shows strong correlation with structural alteration in the presence of NPs. The XRD spectra confirm the disordered nature of the glass and TEM micrograph display the presence of spherical NPs with average size ~26 nm. The optical band gap and Urbach energy calculated from the room temperature absorption spectra recorded in the range of 350-1700 nm reveal significant improvement. The density and refractive index increases and the molar volume decreases with the increase of Fe3O4contents. The energy band gap for direct and indirect transitions varies in the range of 4.47-3.64 eV and 4.27-3.53 eV, respectively. The Urbach energy increases from 0.15 to 0.19 eV as the NPs concentration increases from 0 to 1.5 mol%.