In order to overcome the shortcomings of the low coarse-localization accuracy of a phase difference grating eddy-current sensor (PDGECS), a combinatorial code grating eddy-current sensor (CCGECS) is presented in this paper. A single-track code localization method is adopted in a CCGECS to realize the coarse localization of a grating eddy-current sensor (GECS). This method is used as a replacement of the multi-track phase difference localization method in a PDGECS. The measurement principle of a CCGECS is introduced in this paper. The relationship between measurement accuracy and main characteristic parameters of sensor is obtained by mathematical deduction and error analysis, which offers theoretical foundation for design and technical requirements analysis of a sensor. A simple and practical self-modification method is also introduced in this paper. Experimental results show that adoption of a single-track code localization method to realize the coarse localization has greatly improved the coarse-localization accuracy of a GECS, resolved the contradiction between the coarse-localization accuracy and the measurement range caused by the multi-track phase difference localization method, realized the absolute-position measurement for a larger range and at the same time reduced the technical requirements, which lays a solid foundation for mass production of a CCGECS.