A new UV‐active indole‐pyrazole extended π‐system (probe A) that displays a large bathochromic shift (∼325 nm) when it interacts only with Co2+ and not with other transition metal ions, is presented. The increase in the intensity of new transitions at 592 and 684 nm due to A−Co2+−Cl2.H2O complex formation occurs at the expense of the transition at 358 nm arising from the probe A, and thereby offers a ratiometric method for detection of Co2+ present in aqueous samples. The ratiometric method sets the detection limit for Co2+ at 0.404×10−6 M and 0.337×10−6 M, when calculated for the transitions at 592 and 684 nm, respectively. The corresponding association constants are 4.041×105 M−1 at 592 nm, and 3.617×105 M−1 at 684 nm. Job plot and ESI‐MS data confirmed the 1 : 1 stoichiometry of A−Co2+−Cl2.H2O complex. The mode of interaction between the probe A and Co2+ is explained in terms of conformational isomerization and chelation, using 1H NMR method and DFT calculations. Other metal ions commonly found in the environment do not seem to interfere in the selective determination of Co2+ ions. Suitability of probe A in the detection of Co2+ at concentrations less than 1.7 μM (recommended level of Co2+ ions by US‐EPA) is also demonstrated using water samples collected from the environment. Test kits suitable for routine on‐site analysis are also developed.