In response to the growing number of diabetes cases worldwide, Our study addresses the escalating issue of diabetic eye disease (DED), a significant contributor to vision loss globally, through a pioneering approach. We propose a novel integration of a Genetic Grey Wolf Optimization (G-GWO) algorithm with a Fully Convolutional Encoder-Decoder Network (FCEDN), further enhanced by a Kernel Extreme Learning Machine (KELM) for refined image segmentation and disease classification. This innovative combination leverages the genetic algorithm and grey wolf optimization to boost the FCEDN’s efficiency, enabling precise detection of DED stages and differentiation among disease types. Tested across diverse datasets, including IDRiD, DR-HAGIS, and ODIR, our model showcased superior performance, achieving classification accuracies between 98.5% to 98.8%, surpassing existing methods. This advancement sets a new standard in DED detection and offers significant potential for automating fundus image analysis, reducing reliance on manual examination, and improving patient care efficiency. Our findings are crucial to enhancing diagnostic accuracy and patient outcomes in DED management.