Nilotinib and Combination Chemotherapy in Treating Patients With Newly Diagnosed Philadelphia Chromosome-Positive Acute Lymphoblastic Leukemia or Blastic Phase Chronic Myelogenous Leukemia

Inclusion Criteria: * Untreated, histological confirmed Philadelphia positive B-cell acute lymphoblastic leukemia or chronic myeloid leukemia blast-phase lymphoid lineage (bilineal, biphenotypic or undifferentiated) per World Health Organization (WHO) criteria; NOTE: Dexamethasone (or corticosteroids) use is allowed if needed before starting chemotherapy; prior imatinib or dasatinib therapy for CML chronic phase (CP) or accelerated phase (AP) is allowed * Molecular or cytogenetic documentation of BCR-ABL fusion gene via any of the following: reverse transcriptase-polymerase chain reaction (RT-PCR), G-banding, or fluorescence in situ hybridization (FISH) testing from peripheral blood and/or bone marrow sampling * Eastern Cooperative Oncology Group (ECOG) performance status (PS) 0, 1, or 2 * Magnesium/potassium/phosphorus within normal limits (WNL) * Serum amylase =\< 1.5 x upper limit of normal (ULN) * Lipase =\< 1.5 x ULN * Total bilirubin \< 1.5 x ULN (does not apply to patients with isolated hyperbilirubinemia \[e.g., Gilbert's disease\], in this situation the direct bilirubin =\< 2 x ULN) * Alkaline phosphatase =\< 3 x ULN * Serum glutamic oxaloacetic transaminase (SGOT) (aspartate aminotransferase \[AST\]) =\< 3 x ULN * Serum glutamic pyruvic transaminase (SGPT) (alanine aminotransferase \[ALT\]) =\< 3 x ULN * Creatinine =\< 1.5 x ULN * Negative serum pregnancy test done =\< 7 days prior to registration, for women of childbearing potential only * Provide informed written consent * Willing to return to Mayo Clinic Rochester or Mayo Clinic Arizona for follow-up during the active monitoring phase of the study * Willing to provide CSF and blood samples for correlative research purposes Exclusion Criteria: * Any of the following because this study involves investigational agent(s) whose genotoxic, mutagenic and teratogenic effects on the developing fetus and newborn are unknown: * Pregnant women * Nursing women * Men or women of childbearing potential who are unwilling to employ adequate contraception throughout the study and for 3 months after completion of study treatment * Co-morbid systemic illnesses or other severe concurrent disease which, in the judgment of the investigator, would make the patient inappropriate for entry into this study or interfere significantly with the proper assessment of safety and toxicity of the prescribed regimens * Immunocompromised patients (other than that related to the use of corticosteroids) including patients known to be human immunodeficiency virus (HIV) positive (even if on highly active antiretroviral therapy \[HAART\]) * Uncontrolled intercurrent illness including, but not limited to, ongoing or active infection, or psychiatric illness/social situations that would limit compliance with study requirements * Receiving any other investigational agent which would be considered as a treatment for the primary neoplasm * Other active malignancy =\< 3 years prior to registration; EXCEPTIONS: Non-melanotic skin cancer or carcinoma-in-situ of the cervix * History of myocardial infarction =\< 12 months, or congestive heart failure requiring use of ongoing maintenance therapy for life-threatening ventricular arrhythmias * Previous treatment with chemotherapy or any other tyrosine kinase inhibitor (prior imatinib or dasatinib for CML-CP/-AP is allowed) * Impaired cardiac function including any one of the following: * Inability to monitor the QT interval on electrocardiogram (ECG) * Congenital long QT syndrome or a known family history of long QT syndrome * Cardiac ejection fraction (EF) \< 45% * Clinically significant resting brachycardia (\< 50 beats per minute) * Corrected QT interval (QTc) \> 450 msec on baseline ECG; if QTc \> 450 msec and electrolytes are not within normal ranges, electrolytes should be corrected and then the patient re-screened for QTc * Other clinically significant uncontrolled heart disease (e.g. unstable angina, congestive heart failure or uncontrolled hypertension) * History of or presence of clinically significant ventricular or atrial tachyarrhythmias * Patients receiving any medications or substances that are strong or moderate inhibitors of cytochrome P450 3A4 (CYP3A4); use of the following strong or moderate inhibitors are prohibited =\< 7 days prior to registration: * Strong Inhibitors of CYP3A4; \> 5-fold increase in the plasma area under the curve (AUC) values or more than 80% decrease in clearance * Indinavir (Crixivan®) * Nelfinavir (Viracept®) * Atazanavir (Reyataz®) * Ritonavir (Norvir®) * Clarithromycin (Biaxin®, Biaxin XL®) * Itraconazole (Sporanox®) * Ketoconazole (Nizoral®) * Nefazodone (Serzone®) * Saquinavir (Fortovase®, Invirase®) * Telithromycin (Ketek®) * Moderate Inhibitors of CYP3A4; \> 2-fold increase in the plasma AUC values or 50-80% decrease in clearance * Aprepitant (Emend®) * Erythromycin (Erythrocin®, E.E.S. ®, Ery-Tab®, Eryc®, EryPed®, PCE®) * Fluconazole (Diflucan®) * Grapefruit juice * Verapamil (Calan®, Calan SR®, Covera-HS®, Isoptin SR®, Verelan®, Verelan PM®) * Diltiazem (Cardizem®, Cardizem CD®, Cardizem LA®, Cardizem SR®, Cartia XT™, Dilacor XR®, Diltia XT®, Taztia XT™, Tiazac®) * Patients receiving any medications or substances that are inducers of CYP3A4; use of the following inducers are prohibited =\< 7 days prior to registration \* Inducers of CYP3A4 * Efavirenz (Sustiva®) * Nevirapine (Viramune®) * Carbamazepine (Carbatrol®, Epitol®, Equetro™, Tegretol®, Tegretol-XR®) * Modafinil (Provigil®) * Phenobarbital (Luminal®) * Phenytoin (Dilantin®, Phenytek®) * Pioglitazone (Actos®) * Rifabutin (Mycobutin®) * Rifampin (Rifadin®) * St. John's wort * Patients currently receiving treatment with any medications that have the potential to prolong the QT interval and the treatment cannot be either discontinued or switched to a different medication prior to starting study drug * Impaired gastrointestinal (GI) function or GI disease that may significantly alter the absorption of study drug (e.g., ulcerative diseases, uncontrolled nausea, vomiting, diarrhea, malabsorption syndrome, small bowel resection or gastric bypass surgery) * Acute or chronic pancreatic disease * Known cytopathologically confirmed central nervous system (CNS) infiltration * Acute or chronic liver disease or severe renal disease considered unrelated to the cancer * History of significant congenital or acquired bleeding disorder unrelated to cancer * Major surgery =\< 4 weeks prior to registration or not recovered from prior surgery * Treatment with other investigational agents =\< 14 days of registration