This paper presents the development of an instrument using solid state components for luminescence lifetime based sensing. For a number of applications luminescence lifetime based sensing is the preferred method because of its inherent referencing possibility. Further, lifetime based instrumentation promises a simplified optical construction, since the measurement is, within certain limits, independent of the signal intensity. Various measurement schemes have been reported, especially for optical oxygen sensors, using dynamic fluorescence quenching as the information carrier. However, most of them require bulky and expensive instrumentation because of the need for high-frequency modulated excitation sources and detection systems. In general photo-multipliers have been required. We report on the development of a measurement scheme using low-cost semiconductor devices (light emitting diodes, photo-diodes). The detection system is based on heterodyne demodulation techniques for reduction of the signal frequency range. The basic principles of the system is described and a comparison with existing measurement schemes is presented. The capabilities of the system are demonstrated with measurements on two sensor types having luminescence lifetimes in the range of 1 microsecond(s) and 50 microsecond(s) . Finally, a custom CMOS integrated circuit is presented which implements the front-end of the detection system.