A new MOF named Al‐CAU‐10‐OC3H5 is presented (MOF=metal‐organic framework, CAU=Christian‐Albrechts‐University). The material (1) was prepared by incorporating an allyloxy functionalized 5‐(allyloxy)isophthalic acid (H2AIA) as a linker via a traditional solvothermal procedure. Various analytical tools such as FT‐IR, PXRD, thermogravimetric and N2 physisorption analyses were utilized to characterize the material. Material 1 is stable up to 350 °C in argon environment. It also showed good stability of its framework in acetic acid, 1 (M) HCl, water, methanol, ethanol and acetone. The activated form of material 1 (named 1′) displayed sensitive recognition of Pd(II) ion having great specificity in water through “turn‐off” fluorescence signal. When the potentially competitive analytes were present, the probe can also recognize Pd2+ ion selectively. The values of Stern‐Volmer constant (1.05×105 M−1) and detection limit (26.24 ppb) prove the remarkable sensing ability of this probe. Furthermore, from the PXRD study after Pd2+ sensing, it was observed that the peak position and crystallinity of the MOF were very similar with the activated MOF which suggest the maintenance of structural integrity during the sensing experiment. Hence, the probe is highly effective for the sensing of Pd2+. In addition, the sensing mechanism has been investigated comprehensively.