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Physical layer security has gained an increasing attention due to its efficiency and simplicity as compared to other conventional security protocols. Thus, it has been recently nominated for Internet of Things (IoT) applications. In this paper, a novel key distribution mechanism is proposed for IoT networks. The proposed mechanism exploits the channel diversity to distribute encryption keys among nodes within the network. A main novelty aspect of the proposed mechanism is that it guarantees distributing different keys with different lengths to all nodes at the same time. In addition, an intelligent eavesdropper model has been considered. Simulation results prove the high performance of the proposed scheme and its robustness against channel estimation errors, and immunity against eavesdroppers.