The formation of poly(acrylic acid) (PAA) and poly(allyamine hydrochloride) (PAH) multilayers on an optical fibre long period grating (LPG) by the layer-by-layer (LbL) assembly technique for highly sensitive ammonia gas detection is reported. Observation of the LPG's transmission spectrum indicated that the refractive index (RI) of the PAH/PAA alternate layer film was changed on exposure to ammonia, possibly via a change in the structure of the polyelectrolyte multilayers. PAA could act as a receptor for binding of amine compounds including ammonia, which would induce changes in the coating properties such as optical thickness (OT), film thickness/density and electrostatic interaction, thus influencing the transmission spectrum of the LPG. The ammonia binding is based on the acid-base interaction to free carboxylic acid groups of PAA. An LPG of period 100 μm with a 7-cycle PAH/PAA coating exposed to ammonia exhibited a limit of detection of 10.7 ppm. Film morphology and thickness changes due to the binding of ammonia gas, explaining the sensing mechanism, were confirmed through atomic force microscopic (AFM) measurements.