With increasing industrial activities, mercury has been largely discharged into environment and caused serious environmental problems. The growing level of mercury pollution has become a huge threat to human health due to its significant biotoxicity. Therefore, the simple and fast means for on-site monitoring discharged mercury pollution are highly necessary to protect human beings from its pernicious effects in time. Herein, a “turn off” fluorescent biosensor (mCherry L199C) for sensing Hg2+ was successfully designed based on direct modification of the chromophore environment of fluorescent protein mCherry. For rapid screening and characterization, the designed variant of mCherry (mCherry L199C) was directly expressed on outer-membrane of Escherichia coli cells by cell surface display technique. The fluorescent biosensor was characterized to have favorable response to Hg2+ at micromole level among other metal ions and over a broad pH range. Further, the cells of the fluorescent biosensor were encapsulated in alginate hydrogel to develop the cells-alginate hydrogel-based paper. The cells-alginate hydrogel-based paper could detect mercury pollution in 5 min with simple operation process and inexpensive equipment, and it could keep fluorescence and activity stable at 4 °C for 24 hr, which would be a high-throughput screening tool in preliminarily reporting the presence of mercury pollution in natural setting.