An iterated improved reduced system (IIRS) procedure combined with sub-structuring scheme for nonclassically damped structural systems is presented. For dynamic analysis of such systems, complex eigenproperties are required to incorporate properly the nonclassical damping effect. In complex structural systems, the equations of motion are written in the state space from. Thus, the number of degrees of freedom of the new equations of motion and the size of the associated eigenvalue problem required to obtain the complex eigenvalues and eigenvectors are doubled. Iterated IRS method is an efficient reduction technique because the eigenproperties obtained in each iteration step improve the condensation matrix in the next iteration step. However, although this reduction technique reduces the size of problem drastically, it is not efficient to apply this technique to a single domain finite element model with degrees of freedom over several thousands. Therefore, for a practical application of the reduction method, accompanying sub-structuring scheme is necessary. In the present study, iterated IRS method combined with sub-structuring scheme for nonclssically damped structures is developed. Numerical examples demonstrate the convergence and the efficiency of a newly developed scheme.