Coherent precipitates on growth can become semi-coherent by the formation of interfacial misfit dislocation loops (beyond the critical size r*). In the current investigation the growth of a coherent precipitate and a dislocation loop is simulated by finite element method (FEM). Using a combined simulation of a precipitate and a dislocation loop the critical size r* is determined. Additionally, the critical size (rc) at which the loop is locally stable in the radial direction is determined using FEM. The variation in critical sizes is studied as the size of the domain is reduced to nanoscale dimensions. A phase diagram will be evolved (with r* and domain size as axes) demarcating the regions of stability of coherent and semi-coherent states. Further, preliminary experimental investigations the Cu-Fe/Co system will be carried out to study precipitation in bulk and nanoscale systems (using Transmission Electron Microcopy).