Borehole extensometer is an example of geotechnical instrumentation used to measure subsurface movements such as settlement below an embankment or ground heaving resulting from basement excavation. The extensometer instrument records deformation along the axis of the borehole with certain number of measurement intervals and resolution. In order to increase the resolution and accuracy of such data, a novel technique of measuring vertical displacement continuously inside a borehole is proposed using distributed optical fibre strain sensor. This article presents initial development of novel fibre-optic borehole extensometer on the basis of Brillouin Optical Time Domain Analysis (BOTDA). A series of laboratory tests were performed to validate the sensor performance using steel pipe tubes containing cement grout embedded with optical fibre strain cables and were subjected to uniaxial loadings. Results from calibrated sensing cables embedded in the cement grout were very much similar to the electrical based strain gauges mounted externally on the steel pipe. © 2016 Taylor & Francis Group, London.