In this work a process for nano-patterning of conventional giant magneto-resistive (GMR) spin valves by focused ion beam (FIB) technique is investigated. The sensors consisting of Si/SiO2/Ta/Ni79Fe21/Co/Cu/Co/ FeMn/Ta [thickness in nm] were produced by DC magnetron sputtering at a working pressure of 4 μbar. For microstructuring an image reversal based photolithographic process was developed, with which lateral dimensions of several micrometers can be reached. By modeling the sensor resistance as function of the lateral dimensions an effective width reduction of ~ 1.7 μm is found. A further reduction of the sensor dimensions was reached by using a 30 kV Ga+ ion beam from a commercial FIB microscope. After the FIB milling the sensor resistance shows a linear increase with the aspect ratio (length/width) down to ~ 500 nm sensor width. With further reduction of the sensor width, the GMR vanishes. This behavior can be explained by Ga implantation and sputtering effects in a region extending more than 100 nm away from the actual FIB cut edge, which is supported by high resolution EDX analysis.