In the existing designs of fiber Bragg grating (FBG) displacement sensors, a gap is inherently present between the tension rod or cable and the main body of the sensor to allow for relative movement. This gap, however, becomes a critical vulnerability in humid or submerged environments, where moisture ingress can lead to the brittle fracture of FBG and the debonding of adhesives, ultimately resulting in sensor failure. Addressing this issue, this paper introduces a novel moisture-resistant and sensitivity-enhanced FBG displacement sensor. By physically isolating the FBG region from the moving parts of the sensing mechanism, the proposed design effectively blocks the pathway for moisture transmission. The paper elaborates on the structural design, measurement theory, and optimization of cantilever beam parameters. A prototype of the sensor was fabricated, and an underwater testing and calibration setup was established. Experimental results demonstrate that the sensor achieves a sensitivity of 530.77 pm/mm over a 10 mm range. Tests across different temperature intervals reveal that the sensor's output error remains below 20 pm, indicating excellent temperature compensation. Furthermore, a 48-hour creep test showed that the absolute value of the wavelength drift difference for a single grating stabilized around 2 pm, underscoring the sensor's robust performance.