He was also co-ruler of Schleswig from 1375 to 1386. In 1386, he abdicated as Duke of Schleswig in favour of Henry II"s son Gerhard VI of Holstein-Rendsburg, who was confirmed as Gerhard II as Duke of Schleswig by King Olaf II of Denmark. She was the widow of Otto of Saxe-Wittenberg, a son of Rudolph I. They had one daughter:
Elisabeth (1360 – 25 January 1416 in Cammin), married:
Duke Albert IV of Mecklenburg-Schwerin (1363-1388)
in 1404 to Duke Eric V of Saxe-Lauenburg (c 1374 – 1435)
Nicholas died in 1397 and was buried in Itzehoe.
After Nicholas" death his co-ruling nephews Albert II and the elder Gerhard VI partitioned Holstein-Segeberg as a secundogeniture for Albert from Holstein-Rendsburg.
Gerhard VI then continued ruling Holstein-Rendsburg as the sole count.