I've been thinking about it and can't really figure it out. Not enough information.

So, lets pick a game. For example, World of Warcraft or Diablo III.

I suppose every location starts off with a number of sketches or even matte paintings done by a concept artist. It will establish general mood and a number of key points of interest.

Then comes a level desiger and draws general maps in Photoshop, shares with game designers, draws again and so on until he can finally get his hands dirty and start building actual level.

Obviously, in World of Warcraft and Diablo III there is sculpted terrain which could be done only by level designer. But what about architecture and all other assets? Will level desiger model and texture walls, arcs, stairs and so forth? Or does he do rough sketchy 3d models for an environment artist to come forward and build high quality assets based on the level desiger's needs?

And if the level designer is responsible for building rough 3d models, how detailed should they be? For example, in Diablo III there are dozens of different kinds of walls, with or without decorations, columns, holes, ruined elements etc. Will the level designer make all those little things?

It really depends on the game in question but mostly 'no', being a good artist is not part of the design process, though having an eye for the eventual artwork is important. For instance, on a recent game we did what we called 'blue box'ing as the first pass. Basically the area was laid out with basic boxes and raw shapes with a bluish texture which had a grid on them. The grid was supposed to be scaled to match the world unit size for reference purposes, i.e. 1 grid equaled 10 feet or something like that. The level was filled with puzzles, traps, monsters etc within the blue box environment and play through was performed until everyone was happy. The designer described the 'vision' of how the area was supposed to be represented, such as indoor broken down mansion, dirty grimy sewer or possibly very clean research facility etc with notes along the way as to special objects say a mantle with a key quest item, a manhole cover to xyz location or of course a computer terminal. This was handed off to the artists to put in detailed terrain, objects and textures while the designer went on to the next area to be blue boxed.

Many games do this, some do not. For us, the blue boxing was great because we were still playing with character abilities and as such any detailed artwork would slow down required modifications to adjust for the character abilities. I.e. super jumps were added which allowed players to get into places we didn't want them, many blue boxes had to be reworked. If the geometry/art had been more detailed this could have taken a very long time and wasted artist time.

Thank you guys.

Just a little background of mine to remove some of the misunderstanding - I have worked for a couple of years as a level designer in the past, at the very start of my career. I was junior since I mostly was sculpting the terrain and arranging premade assets. Also at present days I am pretty good in 3d graphics overall, I would say upper intermediate user of Maya. Long story short, I think I am familiar with general level design concepts, but I am particulary interested in how do they do the work in major titles.

Anyways, I still can't understand how do they set up the level design pipeline in AAA games.

I doubt there (WoW, Diablo III) were senior level designers who did plans only and then junior/mid guys, who did the levels themselves. Planning takes some time, sure, but not that much. Most of the time goes into building a prototype, playtesting, killing all the stuff and rebuilding. Just look at those dungeons in Diablo, most of them are no more complicated than multi-floor corridors.

Also plans are good, but they lack 3d feeling. In my opinion it is very hard to build good multi-floor level from scratch without adjusting initial plans. I find it a little non-effective if different people would work on plans and on level design itself in 3D app or an editor.

That brings me back to my question about level desigers' responsibilities.

I see that it depends on the game heavily. For example, in "Dishonored" and latest "Lara Croft" the level designers absolutely had to model stuff because of the nature of the game (like they had to measure the distance between buildings in Dishonored to predict if a player can jump between them). But how detailed was their work? Were they building 3d dummies or finished models with sculpts and normal maps and shaders.

Same goes for good old WoW and Diablo. But what did they had to do exactly.

I did some research on Blizzard web-site. In "exterior level designer" vacancy they list the following:

P.S. Bastion is a remarkable game. I have enjoyed every single bit of it

the level designers absolutely had to model stuff because of the nature of the game (like they had to measure the distance between buildings in Dishonored to predict if a player can jump between them

That's not true - the tool that allows a designer to place a house model will usually have some sort of scale in there. It doesn't mean the level designers were modelling the houses. In fact, given that Dishonored has separate teams of level designers and level artists/architects in the credits it's extremely unlikely that level designers were doing the modelling.

Anyway, as you say, the production method depends a lot on the game, and this is why we don't have any standard terminology for designers in this industry. Certain types of game require (or at least benefit from having) level designers with some degree of modelling skills as the tools require them to sculpt or construct the play area, decide on its broad appearance, and so on. Other types of game will have a tool that is more about assembling pre-made objects and the designer here doesn't need to have any sort of modelling or artist skillset.

You say "I find it a little non-effective if different people would work on plans and on level design itself in 3D app or an editor" but others will find it inefficient if you expect one person to have all the skills from planning the level from a game design perspective right down to being able to manipulate the mesh and textures in a modelling tool. People have to play to their strengths, both individually and as a team.

Only the developers on a certain game can tell you exactly how they went about it. Even 2 games with the same engine might approach things differently, if one team is using a lot more prefabricated scenery than the other. The skills involved in level design may overlap with skills involved in environment art, but it all depends on how the team works, and what tools they use, and what sort of game they're making.