Abstract— This paper addresses fault diagnosis in dynamic systems represented by discrete state-space models. The main idea of the paper is to propose a systematic way to implement a Petri net-based fault diagnosis system. This procedure consists of three main steps. In the first step, a fault diagnosis system is built based on the Luenberger observer. In the second step, the obtained fault diagnoser equations are transformed to a suitable format. Finally, in the third step, the obtained equations are implemented by a Petri net called continuous-time delay Petri net (CTDPN) that can realize difference equations. Based on this method, a systematic approach is proposed for realizing a classical fault diagnoser by CTDPN. By integrating the concept of state-space observers and PNs in this paper, new and effective methods are developed for the analysis and fault diagnosis of systems – known as hybrid systems – that have both continuous and discrete variables. The performance of the proposed method is thoroughly investigated, and the obtained results show that the proposed CTDPN can precisely detect the occurred faults, their types and their occurrence time instances.