The conductance sensor based water cut meter is usually used to measure content of the oil-water two phase mixed fluid for periodical well production logging. In order to solve the real-time monitoring problem of downhole water cut, this paper proposes an online water cut measurement system based on the conductance sensor technology. Through the newly developed system, the continuous and permanent water cut measuring can be realized. The system consists of two conductance sensors, one temperature sensor, sampling mechanism and control & storage unit. Due to different density of oil and water, the two conductors with cylindrical poles, equipped on the upside and downside of the fluid inlet respectively, sense the conductivity of the oil-water mixed fluid and the detached water. With the real-time sampled downhole temperature, the conductivity values are compensated to reflect the real characters of the two kinds of liquid. According to Maxwell's model of oil-water mixed fluid and the correction parameters from offline calibration, the water cut is deduced. Since all units are designed with low-power consumption and high protection level, the system can operate permanently and provide online monitoring values. The water cut measurement system is tested in a physical testing environment with different conditions of the oil-water mixing ratio, the mineralization degree of water, the liquid temperature and the flow rate. Testing results show that the water cut in oil-water mixed fluid and the sampled conductivity follow the Maxwell's model approximately, where the error between testing data and theoretical value is within 3% especially for the high water cut cases. When the temperature changes, the measured water cut value basically does not variate, although sampled conductivity of the two sensors change a lot with temperature. Different mineralization degree of water would affect the measured water cut result slightly, which should be due to the conflicts between the large conductance range and the sampling accuracy. The flow rate is another element to make the measured result fluctuation, but the water cut would be stable when using the average value within a period. In brief, the system provides real-time water cut measurement and the measuring accuracy can satisfy the requirements of petroleum production. The conductance sensor based water cut measurement system realizes real-time measuring of oil-water mixing ratio for oil production and can provide online parameters for optimizing production process rapidly. All electronic units are designed with low-power consumption, which ensure the system to run downhole permanently.