In this paper a fibre optic evanescent wave absorption sensor for measuring low concentrations of dissolved ammonia in water ranging from 12ppb to 2800ppb is presented. A plastic clad silica core (PCS) fiber with unclad middle region acts as the sensing element. Exposure of this sensing region to water samples containing Nessler’s reagent causes evanescent wave absorption, which increases with increasing concentration of ammonia. The use of a super-bright blue light emitting diode (LED) as light source reduces the size and cost of the system considerably. In order to reduce the effect of power supply fluctuations or ambient variations of the LED, a reference arm and ratio detector are employed. A comparative study between the present sensor and the conventional spectrophotometric method has also been carried out.