Colorimetric, fluorescence, and paper-based method were developed to measure the Hg level in water using iturin A, a lipopeptide produced by Bacillus subtilis. Firstly, iturin was used to synthesize highly stable and uniformly sized silver nanoparticles (AgNPs). Secondly, the iturin-AgNPs were found to be highly selective and sensitive to Hg. The absorbance of the reaction system showed a good linear correlation with the Hg concentration from 0.5 to 5 mg/L at 450 nm in the UV-Vis spectroscopy detection with the limit of detection (LOD) of 0.5 mg/L. When the reaction system was detected by fluorescence measurement, a good linear relationship was found between the fluorescence intensity and Hg concentration from 0.05 to 0.5 mg/ at 415 nm with the LOD of 0.05 mg/L. Lastly, a paper-based detection method was developed. The developed method was successfully used to detect Hg in contaminated polluted waters and showed acceptable results in terms of sensitivity, selectivity and stability. The paper-based method could distinguish Hg at levels higher than 0.05 mg/L, thereby meeting the guidelines of the effluent quality standard for industries (0.05 mg/L). In summary, this method can be used daily by various industries to monitor the Hg level in effluent water.