To address the need for compact installation and high-precision linear displacement measurement, a novel single-row absolute linear time-grating displacement sensor structure is designed using a dual-frequency magnetic field time-sharing excitation scheme and outlier frequency reduction principle. This design resolves the conflict between increasing the frequency of sensor excitation signals for a higher signaltonoise ratio and achieving high resolution. First, a transient magnetic field coupling model for a planar coil is established to create a single absolute linear time-grating measurement model and its sensing mechanism. The proposed solution for absolute position determination minimizes measurement error influence. Electromagnetic field simulations are used to analyze the coupling characteristics of various induction coil shapes and air gap magnetic fields, leading to an optimized sensor installation gap of 0.6 mm. The sensor employs 500 kHz and 1 MHz time-sharing excitation drive schemes and introduces a novel decoupling method for outlier frequency reduction, which ensures high resolution while enhancing the signal-to-noise ratio. The sensor prototype was fabricated and tested, with experimental results demonstrating a 36.4% increase in measurement accuracy using the outlier frequency reduction method compared to the original direct decoupling method. The sensor provides an effective measurement range of 187.68 mm, with an accuracy of ±4.9 μm and a resolution of 0.14 μm after error compensation. Compared to mainstream international products, this time-grating displacement sensor offers high accuracy, high resolution, compact size, and low cost while reducing reliance on ultra-precise grating etching and electronic subdivision technologies.