One or more embodiments are directed to system in package (SiP) for optical devices, including proximity sensor packaging. One embodiment is directed to an optical package that includes a stacked arrangement with a plurality of optical devices arranged over an image sensor processor die that is coupled to a first substrate. Between the two optical devices and the image sensor processor die there is provided at least a second substrate. In one embodiment, the optical package is a proximity sensor package and the optical devices include a light-emitting diode die and a light-receiving diode die. In one embodiment, the light-emitting diode die is secured to a surface of the second substrate and the light-receiving diode die is secured to a surface of a third substrate. The second and the third substrate may be secured to a surface of the image sensor processor die or to a surface of encapsulation material.