The manual examination of histological images like computed tomography (CT) images by physicians is prone to subjectivity and limited intra and inter-surgeon reproducibility, due to its heavy reliance on human interpretation. As result of which, diagnosis of cancer especially in lungs becomes less accurate and unreliable. So, a computer-aided diagnosis (CAD) system, based on artificial intelligence that efficiently detects nodules of any shape and size, is used for diagnosis without human intervention. In this work, we have developed a two stage CAD system in which the first stage involves pre-processing applied for a better quality image to enable higher success rate on detection following which the cancerous nodule region is segmented. The second stage involves artificial neural network (ANN) architecture which is trained using a modified BFGS algorithm.The proposed system was trained, tested, and evaluated specifically on the problem of detecting lung cancer nodules found on CT images to give a positive detection. A significant comparative analysis was done between the proposed method and several existing CAD systems used for lung nodule diagnosis and the proposed method using training-based neural networks prove to provide accuracy of 96.7% and also better specificity; thus, the overall performance of the CAD scheme was improved substantially.