In this work, a hydrogel-based optical leaky waveguide (OLW) biosensor was developed to detect biomolecules using changes in refractive index (Dn). Hydrogels formed from chitosan and agarose were synthesised to be used as a waveguiding thin film in OLW biosensor. The concentration and thickness of the hydrogels defined by the spin coater speeds and time were optimised to produce a device chip with a single waveguide moded operation of OLW biosensor. The cladding layer was fabricated using 9.5nm titanium coated glass substrate for metal-clad (MCLW) and addition of dye particles (reactive blue 4) for dye-clad (DCLW) format. For the performance of the fabricated device for detection of Dn of a glycerol solution, the highest sensitivity of detection was obtained from MCLW chip made of 2% w/v of chitosan-agarose hydrogel spun at 6000 rpm with LOD: 4.28 x 10–6 RIU, while for DCLW format, the LOD measured at 7.46 x 10–6 RIU. The performance of the device to monitor the protein (bovine serum albumin; BSA and anti-BSA) interaction, the binding affinity in respect of change in peak angle (DӨ°) of chitosan matrix to the protein was measured at DӨ°~(6.2 ± 0.5°)x10–6.