An important issue in power generation and petrochemical industries is the monitoring of pipe wall thickness and corrosion/erosion rate. The pipes are usually subject to erosive and/or corrosive environments and any failure could be catastrophic. While periodic manual ultrasonic thickness measurement is the common practice in many industries, in certain cases, where higher accuracies are required, continuous monitoring systems are required. This paper introduces a measurement algorithm that can accurately measure the pipe wall thickness and estimate the pipe- wall thinning rate. The algorithm incorporates a model-based estimation technique for estimating the pipe wall thickness and thinning rate. It is an on-line non-intrusive ultrasonic thickness measurement tool for quick and accurate estimation of the erosion/corrosion rate and remaining pipe-wall thickness. The technique is applied to data measured from a pipe carrying high temperature liquid. The results show that the system can measure thinning rates as low as 10 µm/year within 5 days of data collection.