In this paper, we report on the comprehensive study on Molybdenum disulfide (MoS2) nanolayer coated etched Fiber Bragg Grating (eFBG) strain sensor. MoS2 nanolayer is coated using Physical Vapor Deposition (PVD) of Molybdenum (Mo) on eFBGs followed by sulfurization of the same in an inert atmosphere at 450° C. Such coating technique provides a direct control over the coating thickness of MoS2, thereby enabling a study based on the effect of nanolayer coating thickness on the intrinsic strain sensitivity as well as the power of the back reflected Bragg wavelength of eFBG in the 0.78eV spectral region. High uniformity of MoS2 nanolayer coating ensures consistent, repeatable and highly linear FBG strain sensors with a correlation coefficient of 0.988 in the range of 0 to $2500~\mu \varepsilon $. A maximum intrinsic strain sensitivity of 6.65 pm/ $\mu \varepsilon $ with a resolution of $\sim 150~\text{n}\varepsilon $ have been achieved with optimized MoS2 coated eFBG sensors. This kind of consistent, highly sensitive and linear strain sensors when incorporated with proper packaging schemes can be particularly useful for applications demanding high sensitivity of FBG sensors such detection of seismic vibrations, underwater acoustic signals, low amplitude accelerations, etc. © 2001-2012 IEEE.