The document presents the design and development of a linear variable differential optical sensor (LVDOS) for small range linear displacement measurement using light intensity variations, specifically through the movement of a metallic obstacle within a hollow channel. This novel sensor employs two photo detectors to measure changes in the intensity of diffuse light as the obstacle moves, ultimately allowing for accurate displacement readings without traditional reflective methods. The experimental results demonstrate its effectiveness in providing reliable performance for detecting small linear displacements.