A design approach to sensor fault detection and isolation (FDI) of helical coil steam generator (HCSG) systems of the International Reactor Innovation Secure (IRIS) reactor is presented. In the design phase, a physical model is first developed to provide a realistic simulation and generate data characterizing the system dynamics. A subspace identification technique is then used to extract a low-order linear state-space model from the data. Finally, a robust dynamic parity space approach is utilized to design residual generators for FDI. This design approach is able to achieve fault isolation following a predetermined logic without the need to use data during fault conditions, which is an unrealistic assumption of many FDI approaches studied for nuclear power plants. The results of the HCSG application show that the approach is robust to not only measurement and process noises but also operation condition changes and has the capability of correct FDI during reactor power transients and during the propagation of sensor faults in a control loop.