Satellite attitude determination accuracy significantly drops when sensor-fault occurs. Hence, a proper mitigation strategy to detect sensor-fault and accurately estimate corresponding fault magnitudes is mandatory for robust and accurate attitude determination. In this paper, a novel sensor-fault tolerant precise attitude estimator is proposed consisting of two stages. In the first stage, sensor-fault is detected, and the associated sensor parameter change is roughly estimated using an interacting multiple-model (IMM) approach. Subsequently, the second stage is triggered. The sensor parameter change is precisely estimated with a new sensor-parameter-augmented filter. This is defined as a selectively augmented extended Kalman filter (SAEKF) in this paper. The conventional augmented extended Kalman filter (AEKF) is computationally more expensive than the proposed SAEKF. The SAEKF augments only the sensor parameters affected by sensor-faults, not the full sensor parameters, into the state vector. This leads to a significant computational time-saving. A transition method from the first stage to the second stage is also investigated. Numerical simulation results demonstrate that the proposed two-stage approach has smaller attitude determination errors than the existing algorithms, ranged from 21.7% to 88.8%, in cases with gyro scale factor error or misalignment. (C) 2019 COSPAR. Published by Elsevier Ltd. All rights reserved.