A water heater includes a leak detection system. The leak detection system includes a leak sensor assembly that is disposed in a bottom pan of the water heater. The leak sensor assembly includes a sensor housing that has a sensor channel that is formed therein such that the sensor channel is disposed at an elevation from a base of the bottom pan when the sensor housing is disposed on the base of the bottom pan. Further, the leak sensor assembly includes a leak sensor that is disposed in the sensor channel of the sensor housing. The leak sensor detects water that leaks from the water heater and accumulates in the bottom pan when a level of the water in the bottom pan rises to the elevation of the sensor channel and the leak sensor that is disposed therein.