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The rolling element bearing is a significant component in rotating machinery. Suitable bearing fault detection and diagnosis (FDD) is vital to maintaining machine operations in a safe and healthy state. To address this issue, an extended observer-based FDD method is proposed, which uses a variable structure feedback linearization observer (FLO). The traditional feedback linearization observer is stable; however, this technique suffers from a lack of robustness. The proposed variable structure technique was used to improve the robustness of the fault estimation while reducing the uncertainties in the feedback linearization observer. The effectiveness of the proposed FLO procedure for the identification of outer, inner, and ball faults was tested using the Case Western University vibration dataset. The proposed model outperformed the variable structure observer (VSO), traditional feedback linearization observer (TFLO), and proportional-integral observer (PIO) by achieving average performance improvements of 5.5%, 8.5%, and 18.5%, respectively. [ABSTRACT FROM AUTHOR]