We study the evolution of nanoparticle morphology through successive stages when Au-Si bilayer on SiO2 is irradiated with 500 keV Xe-ions and resulting luminescence in the UV, Visible and infrared range. An array of nanoscale island morphology is developed on the silica surface in the initial stage of evolution which undergoes gradual burrowing in the silica matrix accompanied by elongation of large ones in the direction of incident ions under cumulative ion irradiation. Burrowing is found to occur in order to minimize the surface free energy of the nanoparticles. Numerical simulation based on the unified thermal spike model shows formation of molten latent tracks due to ions energy release which drive the dewetting of the metal layer and further give mobility to nanoparticle atoms leading to burrowing in the later stage of evolution and elongation of large nanoparticles. Satellite nanoparticles are observed to grow around Au nanoparticles embedded in silica through nucleation of Au atoms dissolved in the matrix by incident ions. The varying diameters of the Au satellite nanoparticles seem to result in luminescence in the UV and infrared range. The observed structure may find application in surface enhanced Raman scattering, catalysis, and LEDs.