A magnetic tracking system for determining position and orientation of an object in three-dimensional space, the system including an electromagnet assembly including first and second electromagnets that are coaxial, non-coincident, and spaced from each other by a fixed distance, at least one magnetometer positioned at a movable location relative to the electromagnet assembly and configured to measure three orthogonal components of a magnetic field vector, and a microcontroller unit operably connected to the at least one magnetometer. The microcontroller unit is configured to control measurement of magnetic fields by the at least one magnetometer and compute a relative position and orientation of the electromagnet assembly and the at least one magnetometer in five degrees of freedom using at least two equations with two unknowns and coordinate transformation equations relating the coordinate frames of the electromagnet assembly and the at least one magnetometer.