A novel synthesis approach is proposed to prepare strong NIR emitting Yb3+ doped YAG (Yb:YAG) nanoparticles at different Yb3+ concentrations by a modified refluxer assisted homogeneous precipitation using dual polymeric surfactant functionalization approach. Ultrafast microwave calcination has achieved Yb:YAG nanoparticles in pseudo-spherical morphology under the influence of polymeric dual SDS-PEG surfactants, evidenced from HR-TEM observation. XRD pattern of Yb:YA(G) nanoparticles calcined at 900 degrees C resulted in cubic phase formation without the evolution of YAlO3 and Y3AlO4 intermediate phases. XPS analysis revealed the presence of Yb3+ and Yb2+ mixed valence states in high-Yb doped YAG, whereas only Yb3+ is seen in moderately-Yb doped YAG nanoparticles. UV-Visible diffuse reflectance spectrum exhibit characteristic optical absorption at 940 nm is attributed to F-2(7/2) -> F-2(5/2) electronic transitions of Yb3+ ions. From these spectral data, optical parameters such as Stark energy splitting (Delta E), absorption coefficient (alpha), refractive index (n) and absorption cross section (sigma(abs)) are estimated. Photoluminescence spectra of moderately (5 at%) doped Yb:YAG nanoparticles showed strong near infrared emission at 1030 nm due to Yb3+ ions that confirmed by XPS analysis. Also, the stimulated emission cross section (sigma(em)) is calculated using Fuchtbauer-Ladenburg equation. The fluorescence decay lifetime result also implies that the moderately doped YY-5S sample exhibits higher decay lifetime of 2.08 ms. In addition, present work explores the thermally stimulated luminescence properties of Yb:YAG nanoparticles for the first time by high energy gamma-ray irradiation at different dose rates. TSL kinetic parameters such as structural factor (mu(g)), order of kinetics (b), trap depth in terms of activation energy (E) and frequency factor (s) are estimated.