Lithium-ion cells exhibit a dilation during charge and discharge cycles and over their lifetime. Quantifying this dilation is a reliable method to characterize materials and observe degradation mechanisms. Currently, such experiments base on dial gauges or laser scanners, which are quite expensive and either unable to measure spatial differences, to apply pressure simultaneously or take up a lot of space. In this work, a new sensor and measurement setup is presented that significantly improves the state of the art. The first priority is a high resolution to measure the dilation accurately. While the absolute accuracy of the setup is around 7 µm, the resolution of the sensor is lower than 4 nm if the cell to sensor distance is less than 3 mm. The second priority is the design of a space saving jig, which still allows the application of a uniform pressure. A setup based on well-characterized foams, which can be compressed to a defined force are combined with an integrated sensor in the compression plates. Finally, the third priority is to use only off-the-shelf parts in order to achieve a cost-efficient product. The sensor is thoroughly explained and simulated under different circumstances. A calibration function is developed to map the nonlinear eddy-current sensor output to the corresponding distance. In the last part, measurements on lithium-ion cells are conducted and the results were compared to earlier literature studies.