A high precision displacement sensor is proposed in this paper. This sensor based on 3times3 optical coupler and analog circuits is linear incremental encoder type. Outputs of optical coupler are processed by analog circuits and generate displacement information. Low cost and high precision are main advantages of this sensor and analog circuits could enhance the maximum measurable velocity compared with digital signal processor (DSP). The resolution of this proposed sensor depends on wavelength of laser lambda and the resolution is lambda/16 = 95.5 nm. The error deviation is 1mum, which is measured during experiment.