In the recent years graphitization of ion-beam induced amorphous layers became the basic tool for device fabrication in diamond. The etchable graphitic layers can be removed to form free-standing membranes into which the desired structures can be sculpted using FIB milling. The optical properties of the devices fabricated using this method are assumed on the model of sharp diamond-air interface. The real quality of this interface could depend on degree of graphitization of the amorphous damage layers after annealing. In the present work the graphitization process was studied using conventional and analytical TEM. It was found that annealing at 550 {deg}C results in a partial graphitization of the implanted volume with formation of the nano-crystalline graphitic phase sandwiched between layers of tetrahedral amorphous carbon. Annealing at 1400 {deg}C resulted in complete graphitization of the amorphous layers. The average size of graphite nano-crystals did not exceed 5 nm with predominant orientation of c-planes normal to the sample surface.