A Dansyl functionalized fluorescent probe (DFFP) has been intended, synthesized, and well-characterized (NMR, IR, Mass, SEM, SCXRD), capable of sensing trace amounts of water contaminant in hygroscopic deuterated solvents by changing colour under UV irradiation. A distinct bathochromic shift in emission spectra of probe DFFP and the visual colour change (Green to Yellow) under UV lamp are the key evidence of the presence of water contaminant. To prove the potentiality of the probe while detecting the remnant water, we did some experimental studies along with exhaustive theoretical evaluation. DFT (Energy optimization and other calculations) helped in better understanding the sensing mechanism and the mode of interactions among probe-water-solvent. Total electron density mapped over Electrostatic Potential Surface and calculation of ESP charges helped in locating more electron-dense regions in the ground state. The involvement of TD-DFT studies helped in finding the possible electronic transitions and corresponding absorption bands. Moreover, the probe is capable of sensing ethanolic water vapour in the gaseous phase. Due to high fluorescence and being nontoxic to cells, probe DFFP could be used as a potential cell imaging dye. It has been employed in a human cancer cell line (A549), and fluorescent confocal microscopic images were obtained. © 2022 Bentham Science Publishers.