A fiber optic based sensor capable of fault detection in both radial and network overhead transmission power line systems is investigated. Bragg wavelength shift is used to measure the fault current and detect fault in power systems. Magnetic fields generated by currents in the overhead transmission lines cause a strain in magnetostrictive material which is then detected by fiber Bragg grating (FBG) sensors. The Fiber Bragg interrogator senses the reflected FBG signals, and the Bragg wavelength shift is calculated and the signals are processed. A broadband light source in the control room scans the shift in the reflected signals. Any surge in the magnetic field relates to an increased fault current at a certain location. Also, fault location can be precisely defined with an artificial neural network (ANN) algorithm. This algorithm can be easily coordinated with other protective devices. It is shown that the faults in the overhead transmission line cause a detectable wavelength shift on the reflected signal of FBG sensors and can be used to detect and classify different kind of faults. The proposed method has been extensively tested by simulation and results confirm that the proposed scheme is able to detect different kinds of fault in both radial and network system.