In this article, an innovative Hydrostatic Level Sensor (HLS) is presented for measuring water height as well as any other liquid height. This HLS is designed using a magnetic sensor based on giant magnetoresistance (GMR) technology to measure the hydrostatic pressure. This unique HLS has stainless steel (SS) diaphragm attached with a permanent magnet that deflects on the application of hydrostatic pressure resulting in a change in magnetic field gradient at the GMR sensor. The GMR sensor chip develops a voltage output with respect to hydrostatic pressure-induced magnetic field gradient which is further, amplified and corrected using signal conditioning chip. The sensor showed 0.05% of the full-scale resolution, the nonlinearity of <± 1%, and excellent reproducibility. Sensors are tested in laboratory set up and in real-time applications. This GMR-based HLS technology was found to be cost-effective to compete with the existing sensors.