Multilayer coatings provide an effective measure to control and optimise of residual stresses, enhance coating adhesion, fracture toughness, wear and corrosion resistance of coating system. In this study, we designed and produced bi-layer and four-layer titanium/titanium nitride magnetron sputtered coating configurations by altering the position of the interlayer. The in-plane residual stresses in different coating configurations are measured by multiple peak grazing incidence X-ray diffraction techniques. Subsequently, the effect of different compressive residual stresses on adhesion, mechanical properties, wear and corrosion resistance of coatings are investigated. Results show that the position of interlayer in multilayer coating configuration has a great impact on relaxation of residual stresses. The residual stresses are relieved by 26% and 46% by lowering the position of titanium interlayer from 800 nm at the top to 1000 nm and 1200 nm, respectively. The nanoindentation hardness is decreased by 11% and 13%, respectively. The wear rate of multilayer coating having interlayer position at 800 and 1000 nm from the top is ≈ 23% lower compared to bilayer however it is increased by ≈ 50% when interlayer coatings position changed to 1200 nm from the top. The interposition of interlayer in multilayer coating configurations decreased the corrosion current density by ≈ 50%. All multilayer coatings including higher residual stresses show better adhesion to the substrate compared to bilayer coatings which shows severe delamination.