The US space agency intended to launch the space craft on Friday afternoon but postponed liftoff after the technical fault was found on Friday.
Nasa has been trying to launch Atlantis for nearly two weeks but its effort have been repeatedly thwarted by unfavourable weather and technical glitches.
Space station assembly has been on hold since the loss of shuttle Columbia and its seven-member crew in 2003.
Nasa said it hope to try to launch the shuttle again on Saturday, the final opportunity before facing a delay until at least late September.
The faulty sensor, in the ship's external fuel tank, is part of a system designed to ensure the shuttle's main engines shut down before the tank runs out of fuel.
One of the four hydrogen sensors failed to respond to computer commands simulating an empty tank during a test on Friday.
Nasa said that it might be possible to launch the six-man craft without repairing the faulty sensor.
Wayne Hale, the shuttle program manager, said Atlantis can fly with just three of the external fuel tank's four hydrogen fuel sensors working.
"If everything is performing as we expect and we just have one sensor continue to be a bad actor, we'll launch tomorrow," he said.
If Nasa does decide to launch on Saturday, liftoff would occur at 11.15 AM (1515 GMT), he said.
NASA delays the launch on Saturday, it might waive a post-Columbia rule requiring daylight flights to try to a night-time launch in late September.
The next daytime launch opportunity would be October 26.