Nonlinear metal-dielectric layered structures are shown to be able to efficiently generate entangled photon pairs using spontaneous parametric down-conversion. Increase of electric-field amplitudes in these structures enhanced by the presence of metal layers is sufficient to compensate for losses inside thin metal layers. As an example, photon pairs emitted from a structure composed of alternating nonlinear dielectric GaN layers and metal Ag layers are analyzed in spectral, temporal as well as spatial domains. Also correlations and entanglement between two photons in a pair are determined. Very narrow photon-pair spectra together with strong directionality of photon-pair emission are observed making the photons suitable for photon-atom interactions. Highly enhanced electric-field amplitudes provide high photon-pair generation efficiencies.

A rigorous description of volume and surface spontaneous parametric down-conversion in 1D nonlinear layered structures is developed considering exact continuity relations for the fields' amplitudes at the boundaries. The nonlinear process is described by the quantum momentum operator that provides the Heisenberg equations which solution is continuous at the boundaries. The transfermatrix formalism is applied. The volume and surface contributions are clearly identified. Numerical analysis of a structure composed of 20 alternating GaN/AlN layers is given as an example.