Metal-Insulator-Metal capacitors, with ZrO₂/Al₂O ₃/ZrO₂ (ZAZ)-nanolaminate thin-films as a dielectric layer, exhibit reduced leakage currents compared to corresponding capacitors based on pure ZrO₂ while maintaining a sufficiently high dielectric constant for the DRAM application. This work is a comparative study demonstrating how the incorporation of a small amount of Al is responsible for the suppression of crystallization during deposition. Extensive electrical characterization leads to the identification of a defect band which conductive atomic force microscopy shows to be formed along crystallite grain boundaries, extending through the entire ZrO₂-film. The incorporation of a sub-layer of Al₂O₃ prevents these grain boundaries resulting in an effective reduction of leakage currents, despite the film being in the nanocrystalline phase, necessary for it to exhibit the required high dielectric constant. A transport model based on phonon assisted trap to trap tunneling is proposed.