When a beam of charged particles passes through a magnetic field, the beam is defected from its straight line path due to the forces acting on the particles. A current flowing in a conductor, such as a beam, is deflected by a magnetic field. This effect is called Hall Effect.
The working principle of Hall Effect sensor is that if a strip of conducting material carries a current in the presence of a transverse magnetic field as shown in figure above, the difference of potential is produced between the opposite edges of the conductor. The magnitude of the voltage depends upon the current and magnetic field. The current is passed through lead 1 and 2 of the strip and the output leads 3 and 4 are connected with a Hall strip. When transverse magnetic field passes through the strip, the voltage difference occurs in the output leads.