Fluids are normally transported from one place to another through pipelines. It is essential to monitor the pipeline to avoid leakage or theft. It is expensive and not feasible to install cameras and sensors along the whole length of the pipeline. A system and method for inspecting and detecting fluid leakage in a pipeline has been provided. The system is using vibration sensors along with pressure sensors to detect the leakage or theft along with the exact location of the leakage or theft. The pressure sensors are mounted on the pipeline so that the fluid touches the diaphragm of the pressure sensors to sense the wave generated due to leakage. The vibration sensors are mounted on top of the pipeline surface and on the nearby ground to eliminate general noise conditions. Moreover, two pressure sensors are also installed at opposite sides to pinpoint the leakage location.