There is a variety of methods used for remote sensing of objects such as acoustic, ground penetration radar detection, electromagnetic induction spectroscopy, infrared imaging, thermal neutron activation, core four-pole resonance, neutron backscattering, X-ray backscattering, and magnetic anomaly. The method that has to be used can be determined by the type of material, geographical location (underground or water), etc. Recent studies have been concentrated on the improvement of the criteria such as sensing distances, accuracy, and power consumption. In this paper, anomalies created by materials with magnetic characteristics at the perpendicular component of the Earth magnetic field have been detected by using a KMZ51 anisotropic magnetoresistive sensor with high sensitivity and low power consumption, and also, the effects of physical properties of materials on magnetic anomaly have been investigated. By analyzing the graphics obtained by 2-D motion of the sensor over the material, the most appropriate mathematical curves and formulas have been determined. Based on the physical properties of the magnetic material, the variations of the variables constituting the formulas of the curves have been analyzed. The contribution of this paper is the use of the results of these analyses for the purpose of identification of an unknown magnetic material. This is a new approach for the detection and determination of materials with magnetic characteristics by sensing the variation at the perpendicular component of the Earth magnetic field. The identification process has been explained in detail in this paper.