This paper reports on the effect of yttrium oxide as a novel treatment to improve the photoluminescence intensity and stability of porous silicon (PS). Yttrium oxide (Y2O3) was incorporated into the PS layers by impregnation method using a saturated aqueous solution. The penetration of Yttrium into the PS microstructure was examined using the Energy Dispersive X-ray spectrometry (EDS) and the Backscattered Electron Detector (BED-C) for composition imaging and analysis. The morphology of the front surface was studied using a Field Emission Scanning Electron Microscope (FESEM). The deposited yttrium oxide onto the PS layers was thermally activated to passivate efficiently the silicon dangling bonds, and prevent the porous silicon from huge oxidation. The photoluminescence (PL) peak intensity of impregnated PS was increased noticeably compared to the as-prepared untreated PS. Unlike the as-prepared PS photoluminescence dependence with aging, the yttrium-passivated PS layers PL peak shows no shifts during aging allowing a high stability. Furthermore, we obtained a significant improvement of the effective minority lifetime (Teff) after a short anneal at 600 °C, while increasing the temperature reduces noticeably the passivation properties. The improved surface passivation experienced after the thermal annealing can be ascribed to yttrium diffusion into the PS layer, with a resulting redistribution of yttrium oxide and subsequent passivation of silicon dangling bonds in the sub-interface region, this was confirmed by EDS analysis. The internal quantum efficiency (IQE) measurements were performed to study the optoelectronic properties of the processed monocrystalline silicon substrates.