In this paper, a novel sensor system is presented for estimating the velocity using a modulated motion blur. By moving a camera mounted on the vehicle body with a specific pattern when the vehicle is moving, the blurred image includes the information of the vehicle velocity of the camera itself. It will be shown that the inclinations of motion blur in a scene are directly related to the velocity vector of the vehicle and the modulation speed. The proposed approach invariant to the exposure time provides the magnitude and direction of the velocity vector with high accuracy and high reliability. In contrast to other approaches using a camera image, our approach requires only 256 x 192 [ pixel], and the proposed algorithm is simple and fast. The efficacy of the proposed method is demonstrated through simulations and experiments. The experimental results present empirical evidence to support that the proposed system is robust to climate changes such as rainy or snowy weather. The proposed system is expected to be applicable to vehicular technologies such as the vehicle dynamics controlling system or the vehicle positioning system.