The paper deals with the problem of defining the optimal topology for a distributed fault detection architecture for non-linear large-scale systems. A stochastic modelbased framework for diagnosis is formulated. The system structural graph is decomposed into subsystems and each subsystem is monitored by one local diagnoser. It is shown that overlapping of subsystems allows to improve the detectability properties of the monitoring architecture. Based on this theoretical result, an optimal decomposition design method is proposed, able to define the minimum number of detection units needed to guarantee the detectability of certain faults while minimizing the communication costs subject to some computation cost constraints. An algorithmic procedure is presented to solve the proposed optimal decomposition problem. Preliminary simulation results show the potential of the proposed approach.