A parametric approach to robust fault detection in linear systems with unknown disturbances is presented. The residual is generated using full-order state observers (FSO). Based on an analytical solution to a type of Sylvester matrix equations, the parameterization of the observer gain matrix is given. In terms of the design degrees of freedom provided by the parametric observer design and a group of introduced parameter vectors, a sufficient and necessary condition for fullorder state observer design with disturbance decoupling is then established. By properly constraining the design parameters according to this proposed condition, the effect of the disturbance on the residual signal is also decoupled, and a simple algorithm is developed. The presented approach offers all the degrees of design freedom. Finally, a numerical example illustrates the effect of the proposed approach.