•Alginate nanoparticles was synthesised via ultrasonic-assisted nanoprecipitation.•Alginate nanoparticles was converted to carbon nanoparticles via acid dehydration.•Carbon nanoparticles formed were fluorescent.•Carbon nanoparticles were used as optical sensing probe for ferric ions. Carbon nanoparticles have emerged as a promising alternative to the well-known quantum dots in many biological applications due to their excellent optical properties and biocompatibility. It has received considerable attentions from researchers especially in the aspects of producing these carbon nanomaterials via easier and cheaper synthetic routes. On this motivation, we hereby report an economical and facile synthesis of carbon nanoparticles from alginate via a simple two-step procedure; nano-precipitation through ultrasonication followed by thermal acid carbonisation. Nano-precipitation was first performed on the alginate stock solution to produce nanoparticles with controlled morphology. Precipitation was performed in acidic solution that has coagulated the alginate chains into nanoparticles. Ultrasonic treatment was found crucial to assist the formation of nanoparticles that were more homogenous in the size distribution at around 100nm. The shape was also more spherical as compared to those without ultrasonic treatment. In the carbonisation step, thermal dehydration was employed using concentrated sulphuric acid that has successfully converted the preformed alginate nanoparticles into carbon nanoparticles. The carbon nanoparticles isolated showed high fluorescence even without further surface passivation. The fluorescence of these carbon nanoparticles were utilised for sensitive and selective sensing of ferric ions and it was evaluated to have a linear analytical dynamic range up to 25μM with a limit of detection (LOD) as low as 1.06μM. The system was successfully employed to detect ferric ions in real water sample.