This study presents part-II of the work-in-progress for the development of a high-speed wind tunnel under the EU Commission (ERDF) project. This study was carried out after the inlet section of the supersonic wind tunnel prototype had been designed in part-I [1] by introducing a simplified design approach of “table of inclination”. The design optimization of the exhaust section, i.e., diffuser of the wind tunnel is the main objective of the current study. Diffuser design optimization was carried out in three steps; at first, the selection of the diffuser type was carried out and the initial estimated design was created. In the next step, 2D optimization of the wind tunnel design was carried out, and finally, 3D optimization of the complete wind tunnel model was performed. The main geometric parameters of diffuser design were optimized using CFD analysis. Due to the proposed design optimization strategy, the conventionally long diffuser length was successfully reduced. Additionally, 3D optimization further improved the design and helped to resolve the problem of higher operating power. This compact wind tunnel duct will have relatively lower manufacturing costs as well as the overall testing facility will occupy a smaller space. The optimized design of the diffuser and its integration with the inlet section of the wind tunnel marked the completion of the design of the full wind tunnel duct.