In the present study the most efficient 𝑅-factor controlling the ars operon was selected after screening of 39 Escherichia coli isolates by minimum inhibitory concentration test (MIC) studies from water samples of different geographical locations of India. Among all, strain isolated from Hooghly River (West Bengal) was found to have maximum tolerance towards arsenic and was further used for the development of bioreporter bacteria. Cloning of the ars regulatory element along with operator-promotor and luxCDABE from Photobacteria into expression vector has been accomplished by following recombinant DNA protocols. The bioreporter sensor system developed in this study can measure the estimated range of 0.74–60 𝜇g of As/L and is both specific and selective for sensing bioavailable As. The constructed bacterial biosensor was further used for the determination of arsenic ion concentration in different environmental samples of India.