The number of people with diabetes is rising day-by-day, which also raises the incidence of diabetic ulcers, sensation loss in the foot’s plantar area, and in extreme instances, amputations. Using customized shoes, unloading orthoses, insoles, and other strategies may help control these issues to some degree. In this work, a novel modular diabetic insole was designed and fabricated to effectively offload the abnormal or peak plantar pressures in diabetic patients. The pressure values in the plantar region were quantified using an in-house-developed plantar pressure-measuring insole consisting of force sensitive resistor (FSR) sensors. The effectiveness of the modular diabetic insole was tested qualitatively and quantitatively. The qualitative performance of the insole was reported using Quebec User Evaluation of Satisfaction with Assistive Technology (QUEST 2.0) in terms of subjective parameters like comfort, ease of use, effectiveness, etc. and calculated as 4.7 ± 0.18. Thereafter, the wearable pressure-measuring insole was used to investigate the feasibility of modular insole for the plantar pressure offloading during standing and walking conditions. It was observed that the maximum average zonal pressure (AZP) was reduced by up to 99% from 121.30 ± 3.72 kPa to 0.22 ± 0.18 kPa for the standing condition whereas it was reduced to 6.76 ± 2.03 kPa from 197.71 ± 3.21 kPa with a percentage value of 96% for the walking condition. In conclusion, the findings of this work validate the effectiveness of the modular diabetic insole as an intervention tool for diabetic foot ulcer prevention.