Sinkhole formation caused by leaking pipes in karst soluble rocks is a significant concern, leading to infrastructure damage and safety risks. In this paper, an experiment was conducted to investigate sinkhole formation in dense sand induced by a leaking pipe. Fibre Bragg gratings (FBGs) sensors were used to record the strain. A balloon was gradually deflated within a bed of wet silica sand to create an underground cavity. Eighteen FBG sensors, with a wavelength range between 1550 nm and 1560 nm, were embedded horizontally and vertically in the physical model at different levels to monitor deformation at various locations. A leaking pipe was installed to induce the collapse of the formed arch above the cavity. The strain measurements suggest four phases in the sinkhole formation process: (1) cavity formation, (2) progressive weathering and erosion, (3) catastrophic collapse, and (4) subsequent equilibrium conditions. The results showed differences in strain signatures and distributions between horizontal and vertical measurements. During the critical phase of sinkhole collapse, horizontal measurements primarily showed tension, while vertical measurements indicated compression. This investigation demonstrates the effectiveness of FBGs as advanced monitoring tools for sinkhole precursor identification. The study also suggests using FBGs in geotechnical monitoring applications to improve understanding and mitigation of sinkholes and related geohazards.