This paper presents a design approach for a magnetic sensor module to detect mover position using the proper orthogonal decomposition-dynamic mode decomposition (POD-DMD)-based nonlinear parametric model order reduction (PMOR). The parameterization of the sensor module is achieved by using the multipolar moment matching method. Several geometric variables of the sensor module are considered while developing the parametric study. The operation of the sensor module is based on the principle of the airgap flux density distribution detection by the Hall Effect IC. Therefore, the design objective is to achieve a peak flux density (PFD) greater than 0.1 T and total harmonic distortion (THD) less than 3%. To fulfill the constraint conditions, the specifications for the sensor module is achieved by using POD-DMD based reduced model. The POD-DMD based reduced model provides a platform to analyze the high number of design models very fast, with less computational burden. Finally, with the final specifications, the experimental prototype is designed and tested. Two different modes, 90° and 120° modes respectively are used to obtain the position information of the linear motor mover. The position information thus obtained are compared with that of the linear scale data, used as a reference signal. The position information obtained using the 120° mode has a standard deviation of 0.10 mm from the reference linear scale signal, whereas the 90° mode position signal shows a deviation of 0.23 mm from the reference. The deviation in the output arises due to the mechanical tolerances introduced into the specification during the manufacturing process. This provides a scope for coupling the reliability based design optimization in the design process as a future extension.