Fe73-xAlxSi14B8.5Cu1Nb3.5 (x = 0, 2) nanocomposite materials consisting of a nanocrystalline phase in an amorphous matrix were obtained by annealing their precursor amorphous ribbons, which were prepared by the melt-spinning technique, at different temperatures ranging between 350 degrees C and 650 degrees C for 45 min in vacuum. Investigation on their magnetic and magnetoimpedance properties indicates that the Al-containing sample (x = 2) possesses superior magnetic softness and giant magnetoimpedance (GMI) effect over the Al-free counterpart. This can be likely ascribed to the increased magnetic permeability, decreased coercive force and decreased resistivity. The increased magnetic permeability is resulted from a reduction in magnetocrystalline anisotropy and saturation magnetostriction. The correlations between magnetic softness, electrical properties and GMI behaviour is discussed in the light of the skin effect model. These results indicate that the Al-containing Fe-based nanocomposite material can be used for GMI sensor applications.