A new optical sensor was designed for sensitive, selective detection and determination of Cd$^{2+}$, Cr$^{3+}$, Ni$^{2+}$ and Pb$^{2+}$ based on immobilization of dithizone (DZ) on a BiFeO3 (BFO) nanopowder. The sol–gel technique has been used for the synthesis of nano-multiferroic BiFeO$_3$ in a pure form. The effect of DZ concentration, stirring time, pH and BFO molar concentration for immobilization of DZ as an indicator on BFO nanoparticles was developed. Highly sensing and colour change of the optical sensor of the studied metals Cd$^{2+}$, Cr$^{3+}$, Ni$^{2+}$ and Pb$^{2+}$ showed detection limits of 1.65${\times}$10$^{-4}$, 1.5${\times}$10$^{-4}$, 3${\times}$10$^{-4}$ and 7.8${\times}$10$^{-5}$ M, respectively. The optical sensor’s response time to studied metals varies with the concentration of metals. The prepared optical sensor was used to analyse the industrial wastewater sample qualitatively and quantitatively. Atomic absorption spectrometer analysis verified the assayed levels of Cd$^{2+}$, Cr$^{3+}$, Ni$^{2+}$ and Pb$^{2+}$. The sensor efficiencies for Cd$^{2+}$, Cr$^{3+}$, Ni$^{2+}$ and Pb$^{2+}$ were 95.27, 84.56, 84.99 and 104.73%, respectively.