This article presents an innovative induction motor state observer designed to reconstruct magnetic fluxes and the angular speed of an induction motor for speed sensorless control system applications such as field-oriented control (FOC). This observer is an intermediate solution between the proportional observer and the classical proportional-integral (PI) observer with respect to which the order of the integrating unit is reduced. Additional modifications of the observer’s structure have been implemented to ensure stability and to improve its functional properties. As a result, two versions of the observer structure were produced and experimentally tested using a sensorless FOC control system. Both structures resulted in correct control system operation for a wide range of angular speeds, including low speed ranges.