Silver nanoparticles capped with tri sodium citrate were synthesised to use as optical sensor for the determination of ferric ions (Fe3+). A simple synthesis method is described in this paper and the process does not require harsh conditions or sophisticated instrumentation.Synthesised citrate capped silver nanoparticles were characterised using UV-Vis spectroscopy, fluorescence spectroscopy, FT-IR spectroscopy, scanning electron microscopy and particle size analysis. The freshly prepared silver nanoparticles were yellow in colour due to intense surface plasmon resonance (SPR) absorption band at 393 nm. In the presence of Fe3+ colour of the silver nanoparticles turned

to colourless with the broadening and reduction of the SPR band. This is possibly due to the electron transfer on the surface of the silver nanoparticles. The concentration of Fe3+ can be quantified using a UV-Vis spectrophotometer. The change in the SPR absorption is linear with the concentration of Fe3+ ranging from 4 x 10-4 mol dm-3 to 1 x 10-3 mol dm-3 with the correlation co-efficient of 0.98.The limit of detection (LOD) of this system is 1.3 x 10-4 mol dm-3.Under optimum conditions Fe3+ can be selectively sensed in the presence of other metal ions such as Al3+, Fe2+,Co2+,Ni2+,Cu2+, Zn2+,Mn2+,Mg2+, K+ and Na+.