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Wear and tear from sustained operations cause systems to degrade and develop faults. Online fault diagnosis schemes are necessary to ensure safe operation and avoid catastrophic situations, but centralized diagnosis approaches have large memory and communication requirements, scale poorly, and create single points of failure. To overcome these problems, we propose an online, distributed, model-based diagnosis scheme for isolating abrupt faults in large continuous systems. This paper presents two algorithms for designing the local diagnosers and analyzes their time and space complexity. The first algorithm assumes the subsystem structure is known and constructs a local diagnoser for each subsystem. The second algorithm creates the partition structure and local diagnosers simultaneously. We demonstrate the effectiveness of our approach by applying it to the Advanced Water Recovery System developed at the NASA Johnson Space Center.