Nitric oxide (NO) and NO-water clusters play crucial roles in the D-region of the atmosphere because it is postulated that NO+ reacts with H2O to produce nitrous acid (HONO) and H3O+. HONO is the major precursor of the hydroxyl radicals leading to the formation of secondary pollutants. The sources of atmospheric HONO, however, are not fully understood. Previously, the sequential H2O addition reaction, H2O + NO+(H2O)n, and the bi-molecular collision reaction, NO+ + (H2O)n, have been investigated by both experiments and theoretical calculations to determine the formation mechanism of HONO. However, the photo-reactions from NO(H2O)n neutral clusters were not considered for the formation mechanism of HONO. In this study, the intra-cluster reactions of NO+(H2O)n clusters, following ionization of the parent neutral cluster of NO(H2O)n, were investigated using the direct abinitio molecular dynamics method. When n = 4, [NO+(H2O)4]ver [vertical ionization state of NO(H2O)n] yielded HONO and hydrated H3O+ after the intra-cluster reaction, and the reaction time was calculated to be 150fs. The reaction is expressed as [NO+(H2O)n]ver → HONO + H3O+(H2O)n-2 (reactive) (n > 3). Larger clusters of [NO+(H2O)n]ver (n = 5-8) also yield HONO. In contrast, in smaller clusters (n = 1-3), only solvent re-orientation around NO+ occurred after the ionization: [NO+(H2O)n]ver → NO+(H2O)n (solvent re-orientation) (n = 1-3). The hydration energy of H3O+, which depends on the cluster size (n), plays an important role in promoting the formation of HONO. The reaction mechanism is discussed based on theoretical results.