Fish use the lateral line system to detect swimming objects within a range of a few body lengths to avoid collision. This is achieved by detecting particle velocity and acceleration with receptors which are distributed all over the skin. In this work, this principle is imitated by means of a hydrophone array detecting particle accelerations. In a two-dimensional simulation setup, a dipole source is detected in presence of high-level noise and a disturbing source. This is achieved by a hull mounted vector hydrophone array applying low-frequency nearfield acoustic holography and an adaption of minimum energy method which simulate the lateral line. Noise is added to simulate decorrelated signals—like ambient noise and reverberation—whereas a disturbing dipole source creates highly correlated disturbing signals at the hydrophone positions which is typical for early reflections and sound sources outside the detection area. At the hydrophone array the noise is up to almost 70 dB louder than the radiated source signal. Despite these difficult conditions the proposed method localizes the source reliably within the range of a few array lengths. The system could be implemented in vessels for short-range navigation in coastal and littoral areas or underwater vehicles for mine deployment and harbor construction works.