Today, as the importance of system automation increases, measurement systems become more and more important. Consequently, in many applications, from washing machines, motorized vehicles, robots to nuclear turbine reactors, velocity measurement is inevitable. In industry, velocity is widespreadly needed to be measured. Besides that researchers through the globe need such measurement devices in their studies. On the other hand, to be able to make a correct measurement, it may be needed to pay much on measuring equipments while the economical issue is sometimes the reason for the research does not continue on or even not begin. So, it has always been a practical problem for both industry and researchers not to be able to measure the rotating velocity of machinery with both sufficient precision and low cost. In this paper, a very low cost but still precise velocity measurement system design is introduced, explained and discussed. First, building up of the sensor circuit and basic components of the system are introduced. Then, data acquisition and signal processing of the system are explained. Finally, advantages of the system are discussed and some conclusions are given.