Nanoscale multilayered metal coatings have high potential for numerous engineering applications due to their unprecedented compressive strength which far exceeds the individual constituents. However, the mechanical strength and ductility of the nanolayered structures under tension have remained largely unexplored. Here, we use large-scale massively parallel molecular dynamics (MD) simulations to understand the strengthening and ductility mechanisms of nanoscale Cu/Ag multilayered composites under tension. Our MD simulations reveal that the inherent flaws in the nanolayers, in the form of columnar grain boundaries, can trigger new mechanism of interlayer interface migration, causing wavy nanolayer structures to develop. This interface migration mechanism is triggered by the competition between increase in interface energy and the relaxation of Cu/Ag lattice mismatch stresses. In addition, the columnar grain boundaries also emit and absorb dislocations. The resulting dislocation slip allows flaws within the interlayer to seamlessly communicate, and contributed to delocalized fracture and enhanced ductility of the multilayered structure. These tension-activated mechanisms are very different from mechanisms activated under compression, which explains the differences in yield strengths measured by experiments conducted under tension and compression.