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In the presented work an innovative method of measurement of oil contamination in water based on image processing is discussed. The proposed approach of oil contamination measurement is inexpensive and does not require physical contact of the sensor with the water to be tested. A Micro- Electro-Mechanical-Sensors (MEMS) based camera is used for taking the water surface image to calculate the oil contamination by comparison of oil surface area to that of the total water surface area. During pre-processing, the image taken by the camera is converted from the colour to grey scale by using convert function in the image library of Python 3.4 which uses RGB approximation and reduction and addition of chrominance and luminance. Later, Canny edge detection algorithm along with one of the morphological operations, namely closing operation is used for the measurement. Iterations are performed with the water samples treated with a novel method by using biological material inspired micro particles, which reveals that the proposed method can detect the oil contamination within 0.5% of the total water surface area.