Diamond coated cobalt-cemented tungsten carbide (WC-Co) cutting tools are widely used for machining light-weight engineering parts made of composite materials. Despite the existence of several methods that can monitor the cutting tools' failure, an earlier prediction only about the coating's wear situation before substrate damage is still missing. In this study, the development of a wear sensor prototype based on a nanocrystalline diamond multilayer system is presented. This multilayer system is built up by two conductive nanocrystalline diamond (CNCD) layers and one non-conductive nanocrystalline diamond (NCD) layer in between. Hot-filament chemical vapor deposition (HFCVD) was utilized as coating process for coating the multilayer system onto WC-Co dummy tools, using a gas mixture of methane and hydrogen. The CNCD's specific conductivity is 10 S/cm, whereas NCD's specific conductivity is 5.4 × 10 −6 S/cm. The impedances of the prototype in the as-grown state and after some wear losses were measured. A linear response of the impedance to the multilayer's wear situation was detected. A theoretical model was established for simulating the sensor principle qualitatively and calculating its sensitivity quantitatively. • A grain boundary dominated electrical conductivity at room temperature was found in undoped nanocrystalline diamond, using Hot-filament CVD for film deposition; • Multilayer sensor system prototype was built up with conductive and non-conductive diamond film layers onto cobalt-cemented tungsten carbide (WC-Co) cutting tools; • A theoretical model and an appropriate detection principle measuring impedance of multilayer's as-grown and wear losses situation were successfully achieved; • The wear situation of a cutting tool can be monitored during machining operation, as to realise an efficient protection of the cutting tools' basic body for possible further reusage.