Security becomes extremely important, when wireless sensor networks are deployed in a hostile environment. In order to provide security, wireless communication should be authenticated and encrypted. Key management is the main problem in wireless sensor networks when concentrated on security. Any key management scheme proposed should have authenticity, integrity, confidentiality, flexibility and scalability. The key management scheme should be scalable to increase in sensor nodes substantially and also its dynamic nature. Asymmetric key management strategies are not suitable for wireless sensor networks as it operate on limited battery life. In the proposed system, key management is provided for privacy and simultaneously validated for security measures. System performance improves in the improved key management scheme by positioning the new node and forming the head for multi-cluster to replace the failed relay nodes. The private key, the multi-cluster key, the primary key, and the structure key are used to encrypt every message passed within the improved key management scheme. The improved key management scheme acquires results on 4–5 % improved security level with lesser execution time and communication energy consumption. A variety of numerical parameters are computed using ns2 simulator on existing key management schemes. The improved key management scheme is highly realistic because it is intended to incorporate routing layer and security protocol without sacrificing energy.