Neutralizing antibodies targeting the SARS-CoV-2 spike protein have shown a great preventative/therapeutic potential. Here, we report a rapid and efficient strategy for the development and design of SARS-CoV-2 neutralizing humanized nanobody constructs with sub-nanomolar affinities and nanomolar potencies. CryoEM-based structural analysis of the nanobodies in complex with spike revealed two distinct binding modes. The most potent nanobody, RBD-1-2G(NCATS-BL8125), tolerates the N501Y RBD mutation and remains capable of neutralizing the B.1.1.7 (Alpha) variant. Molecular dynamics simulations provide a structural basis for understanding the neutralization process of nanobodies exclusively focused on the spike-ACE2 interface with and without the N501Y mutation on RBD. A primary human airway air-lung interface (ALI) ex vivo model showed that RBD-1-2G-Fc antibody treatment was effective at reducing viral burden following WA1 and B.1.1.7 SARS-CoV-2 infections. Therefore, this presented strategy will serve as a tool to mitigate the threat of emerging SARS-CoV-2 variants.