Synthesis of TiO2 nanoparticle through hydrolysis method is presented followed by TiO2nanoparticle doped polyvinyl alcohol nanocomposite by solution process. FTIR, XRD, DSC-TGA, FESEM, TEM analysis are used to identify the nature of synthesized nanoparticle and loading uniformity of developed composite material. A simple modified clad based optical fibre sensor is developed to measure relative humidity. Coated modified clad optical fibre exhibits excellent relative humidity sensing performance with improved thermal stability of coating material in wide range of 9-95 % RH with good process repeatability. Sensor response is also observed to be very fast and highly reversible. Advantage of our developed composite material become evident when it exhibits wider range of moisture sensitivity compare to pure PVA or pure TiO2 material found in literature. Performance of PVA-TiO2 nanocomposite thick film is also evaluated by capacitance method and result found to agree with coated modified clad optical fibre.