In this paper, the design and underpinning technical principles of the novel design of a negative pressure wave (NPW)-based pipeline leak detection system has been reported, which is configured using fiber Bragg grating (FBG) pressure sensors. To evaluate this, a pipeline leakage test platform has been established and experiments have been conducted, to verify the performance of a system using this FBG-based approach. The results show that a system using FBG-based sensors can accurately determine the pressure change trends along the pipeline and thus allow the calculation of the NPW velocity online. A key comparison is made with traditional NPW detection techniques, showing that the novel detection system is capable of achieving the higher leak-location accuracy and the detection of smaller leakage volumes. This arises from the ability of the FBG-based system to allow an increased number of sensors to be multiplexed along the pipeline. Their corresponding output signals generated show a very satisfactory, high signal-to-noise ratio. The system has been evaluated, especially in its response to extraneous signals and thus disturbances caused by the pump starting or stopping can be eliminated. This was achieved through an analysis of the time sequence of the pressure changes captured by the multisensor array being carried out and thus immunity to such effects demonstrated. The system has thus been designed to minimize the instances where a false alarm occurs.