Electrical runout is a bottleneck problem of eddy current sensor, which is caused by the maldistribution/variation of material electromagnetic properties of measurement target. However, extraction methods of electrical runout in eddy current displacement measurement remain ambiguous. Here, a 2D finite element model for the influence analysis of conductivity and permeability of ferromagnetic material on coil impedance of eddy current sensor is reported, which will be beneficial for detecting material properties and guiding manufacturing process. The relationships between the real and imaginary part of coil impedance with the varied material conductivity, relative permeability and the lift-off, which indicates the detecting distance, are investigated. When the conductivity, relative permeability of ferromagnetic material and the lift-off vary within a certain range, the relationships between the real and imaginary part of coil impedance are all nearly linear. This paper further shows that the character of distribution of resistance and reactance in diagram under different material properties and same measuring distance is linear. Furthermore, these lines under different measuring distances are parallel. Also the character under different measuring distances and same material property is linear, but these lines under different material properties are diffuse with same intercept. Altogether, the study shows that this method based on redesign of signal processing and its circuit is feasible and instructive in separating electrical runout from the output of eddy current sensor.