The invention discloses a low deadband magnetostriction displacement sensor. The front end of a measurement circuit board is connected with a cable led out from a cable joint, and the back end of the measurement circuit board is fixed to the front end of a measurement rod by means of a base. A position magnet is arranged on the measurement rod movably. A metal protective sleeve pipe is sleeved by the measurement rod. A testing coil is arranged on the front end of the metal protective sleeve pipe, and a metal plug is arranged on the tail end. A waveguide filament is arranged inside the metal protective sleeve pipe. The waveguide filament passes through the testing coil and is fixed in the metal plug. The front end of the waveguide filament is connected with the measurement circuit board. The testing coil is connected with the measurement circuit board. The front end of the metal protective sleeve pipe is connected with the measurement circuit board through a conductor lead. A compensation magnet is arranged near the testing coil and on the outer side of the metal protective sleeve pipe. The sensor inhibits transient response of the testing coil by adding the compensation magnet to the position near the testing coil, so that the deadband of the sensor is reduced and the linearity of the sensor is improved.