Measurement of refractive index, surface quality and temperature of the process materials in defense, petrochemical, power systems, glass, and metal industries is a fundamental need for precision systems performance. However, making these measurements in a super noisy defense or industrial environment is a big challenge faced by sensor technologies. Reported in this paper is the first ever demonstration of a wavelength multiplexed heterodyne interferometer using a single acousto-optic device (AOD). Heterodyne interferometry is pivotal in realizing a highly stable low noise interferometer. Inspite of the physical separation of the two arms of the interferometer, the sensor demonstrates Angstrom level optical path length sensitivity. The proposed sensor can be used in optical path length measurement-based sensing of parameters such as surface profile, refractive index, temperature, and pressure. Proof-of-concept experiment features a high resolution, low-loss, ultra compact, free space scanning interferometer implementation. Results include measurement of surface quality of a test mirror.