The twin rotor aerodynamic system (TRAS) reflects the dynamics of vertical take-off rotor systems. TRAS considers the coupling effect and gyroscopic disturbance torque as unwanted signals. For safe and reliable TRAS operation, proper control input is vital, along with fast fault indication. This paper addresses the output sensor fault detection problem in the linear model of TRAS subjected to l2-norm bounded disturbance. A robust design of an observer is formulated as H-/H∞ optimization problem to maximize the sensitivity/robustness criterion. The approach minimizes the disturbance effect on the residual signal, which leads to successful fault detection. Furthermore, a linear quadratic regulator-based state feedback controller is proposed to meet the system's desired transient response requirement. The incorporation of an observer-based residual generator for fault detection along with the state-feedback controller differs the current work from the existing work. Successful fault detection in the output sensor of TRAS depicts the good performance of the proposed observer.