A novel signal denoising method using Sym3 wavelet in FMCW Radar lever measurement is proposed. The method provided the signal energy distribution display with respect to the particular time and frequency information. Firstly, the main component of echo signal is extracted by energy analysis and scale decomposition by Sym3 wavelet. Then, the disturbed component is eliminated by frequency filtering. Finally, spectral estimation method is used to estimate the relative distance of the object. The simulation results have shown that the Sym3 wavelet was found to be a better approach for denoising in FMCW Radar lever measurement. The Emulation results have shown that measuring accuracy can achieved the 20 millimeter level which can satisfy the desire requirements of the measurement system.