For any given system the number and location of sensors can affect the closed-loop performance as well as the reliability of the system. Hence, one problem in control system design is the selection of the sensors in some optimum sense that considers both the system performance and reliability. Although some methods have been proposed that deal with some of the aforementioned aspects, in this work, a design framework dealing with both control and reliability aspects is presented. The proposed framework is able to identify the best sensor set for which optimum performance is achieved even under single or multiple sensor failures with minimum sensor redundancy. The proposed systematic framework combines linear quadratic Gaussian control, fault tolerant control and multiobjective optimisation. The efficacy of the proposed framework is shown via appropriate simulations on an electro-magnetic suspension system.