We present significant enhancement of magneto-optical effect at room temperature in GaAs with MnAs magnetic nanoclusters sandwiched by GaAs/AlAs multilayers acting as distributed Bragg reflectors. The experimentally observed transmissivity and magneto-optical spectra are well explained by theoretical calculations. This new material system will open up the possibility of realizing nonreciprocal magneto-optical devices integrated with semiconductor optoelectronic devices and circuits.