Nitrogen dioxide (NO2) is an important air pollutant due to its environmental impact and adverse effects on human health. It is released into the atmosphere primarily through anthropogenic activities. Here, we report on the development of a simple, compact, and cost-effective robust optical detection method exploiting cavity-enhanced absorption spectroscopy for high-sensitive and selective measurement of NO2 levels in real-time using a visible diode laser operating at 406 nm. A typical detection limit of ∼330 ppb for NO2 was achieved with an optimum acquisition time of ∼3.9 s, at optimal cavity pressure of 100 Torr. The sensor system demonstrates an effective optical path-length of 180 m in a high-finesse 50 cm long optical cavity in an interference-free spectral region and aerosol-free conditions. The spectrometer was optimized, calibrated, and demonstrated for the detection of NO2 levels in vehicular exhaust gases.