Th is paper presents a position sensor ba s ed o n a novel configuration of linear variable differential transform er. Design and optimization of the position sensor a re pre sent ed using finite element method. The sensor has short air core coi ls and long magnetic armatures. The arrangement direction of the re ctangular excitation coil and two antiserially connected re ctangular pick up coils is perpendicular to the motion direction of the position sensor. The coils are located be t ween two parallel silicon steel laminations a s t he a rm a t ures. Th e position sensor is optimized wi th compromise between minimization of nonlinearity error and maximum s e nsit ivi t y. The main advantage of the proposed position sensor is the small ratio of coils dimensions to the working range. The position sensor is operated for the measurements and calculations at excit at io n fre quencies, 500 Hz and 1000 Hz and 2000 Hz. The maximum nonlinearity error is less than 1.5% for theoretical analysis a nd i t i s le ss than 2% for the measurement results in ±90 mm position range.