SARS-CoV-2 (COVID-19) pandemic has been an unpredicted burden on global healthcare system by infecting over 700 million individuals, with approximately 6 million deaths worldwide. COVID-19 significantly impacted all sectors, but it very adversely affected the healthcare system. These effects were much more evident in the resource limited part of the world. Individuals with acute conditions were also severely impacted. Although classical COVID-19 diagnostics such as RT-PCR and rapid antibody testing have played a crucial role in reducing the spread of infection, these diagnostic techniques are associated with certain limitations. For instance, drawback of RT-PCR diagnostics is that due to degradation of viral RNA during shipping, it can give false negative results. Also, rapid antibody testing majorly depends on the phase of infection and cannot be performed on immune compromised individuals. These limitations in current diagnostic tools require the development of nanodiagnostic tools for early detection of COVID-19 infection. Therefore, the SARS-CoV-2 outbreak has necessitated the development of specific, responsive, accurate, rapid, low-cost, and simple-to-use diagnostic tools at point of care. In recent years, early detection has been a challenge for several health diseases that require prompt attention and treatment. Disease identification at an early stage, increased imaging of inner health issues, and ease of diagnostic processes have all been established using a new discipline of laboratory medicine called nanodiagnostics, even before symptoms have appeared. Nanodiagnostics refers to the application of nanoparticles (material with size equal to or less than 100 nm) for medical diagnostic purposes. The special property of nanomaterials compared to their macroscopic counterparts is a lesser signal loss and an enhanced electromagnetic field. Nanosize of the detection material also enhances its sensitivity and increases the signal to noise ratio. Microchips, nanorobots, biosensors, nanoidentification of single-celled structures, and microelectromechanical systems are some of the most modern nanodiagnostics technologies now in development. Here, we have highlighted the important roles of nanotechnology in healthcare sector, with a detailed focus on the management of the COVID-19 pandemic. We outline the different types of nanotechnology-based diagnostic devices for SARS-CoV-2 and the possible applications of nanomaterials in COVID-19 treatment. We also discuss the utility of nanomaterials in formulating preventive strategies against SARS-CoV-2 including their use in manufacture of protective equipment, formulation of vaccines, and strategies for directly hindering viral infection. We further discuss the factors hindering the large-scale accessibility of nanotechnology-based healthcare applications and suggestions for overcoming them.