Near-surface nitrogen-vacancy ({NV}) centers in diamond have been successfully employed as atomic-sized magnetic field sensors for external spins over the last years. A key challenge is still to develop a method to bring NV centers at nanometer proximity to the diamond surface while preserving their optical and spin properties. To that aim we present a method of controlled diamond etching with nanometric precision using an oxygen inductively coupled plasma (ICP) process. Importantly, no traces of plasma-induced damages to the etched surface could be detected by X-ray photoelectron spectroscopy (XPS) and confocal photoluminescence microscopy techniques. In addition, by profiling the depth of NV centers created by 5.0 keV of nitrogen implantation energy, no plasma-induced quenching in their fluorescence could be observed. Moreover, the developed etching process allowed even the channeling tail in their depth distribution to be resolved. Furthermore, treating a 12C isotopically purified diamond revealed a threefold increase in T2 times for NV centers with <4 nm of depth (measured by NMR signal from protons at the diamond surface) in comparison to the initial oxygen-terminated surface.