Steel corrosion resulting from the penetration of chloride ions or carbon dioxide is a major cause of degradation for reinforced concrete structures,. The objective of the present investigation was to develop a low-cost sensor for steel corrosion, which is based on a very simple physical principle. The flat end of a cut optical fiber is coated with an iron thin film using the ion sputtering technique. Light is then sent into a fiber embedded in concrete and the reflected signal is monitored. Initially, most of the light is reflected by the iron layer. When corrosion occurs to remove the iron layer, a significant portion of the light power will leave the fiber at its exposed end, and the reflected power is greatly reduced. Monitoring of the reflected signal is hence an effective way to assess if the concrete environment at the location of the fiber tip may induce steel corrosion or not. In this paper, first the principle of the corrosion sensor and its fabrication are described. The sensing principle is then verified by experimental results. Sensor packaging for practical installation will be presented and the performance of the packaged sensors is assessed by additional experiments.