3 at.% Co doped sol-gel derived films were irradiated with 800 keV Ar ion beam. The studied films were un-irradiated and irradiated with fluences 5 x 10(14), 2.5 x 10(15) and 10(16) ions/cm(2). The films were characterized structurally (X-ray diffraction [XRD]), morphologically (Field Induced Scanning Electron Microscopy), optically (UV-visible, Raman spectroscopy and Photoluminescence [PL] measurements), magnetically (field and temperature dependent magnetization measurements) and electronically via local structure study (X-ray Absorption spectroscopy [XAS]). XAS data were interpreted in X-ray absorption near edge spectroscopy (XANEX) and extended X-ray absorption fine structure spectroscopy (EXAFS) measurements. XRD patterns show single-phase wurtzite structure of the films and indicate presence of defects. Raman spectra confirm single-phase structure of the films and indicate slight structural degradation in highest fluence irradiated film. The high substitutional incorporation of Co2+ at Zn2+ site was demonstrated from UV-visible spectra by d-d transition. The analysis of XANES and EXAFS spectra strongly reconfirms further the proper substitutional incorporation of Co2+ at Zn2+ site. All films are intrinsically ferromagnetic. The substantial enhancement of ferromagnetism (2.5 fold) has been observed upon irradiation (highest fluence) and it has been interpreted in terms of defects as evidenced from PL measurement. Hence the effect of Ar ion beam irradiation is highly enhanced ferromagnetism and proper Co substituted ZnO film.