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This paper proposes a simple and novel method of designing and developing high-linearity linear variable differential transformer (LVDT)-based displacement sensing systems. Conventionally, precise adjustment of windings is made to enhance the linearity range of LVDTs. The tedious job of pitch adjustment of windings of LVDTs can be overcome by using the proposed method. A functional link artificial neural network has been successfully used in this paper for nonlinear compensation of the LVDT. The effectiveness of the proposed method is demonstrated through computer simulation with the experimental data of two different LVDT. The complete algorithm with the practical setup for the development of a linear LVDT is presented in this paper.