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This article studies the fault‐tolerant consensus issue of a class of nonlinear two‐time‐scale‐agent systems with heterogeneous sensor faults and external disturbances. First, the decentralized proportional integral (PI) observer for each agent is constructed to estimate the states and sensor faults simultaneously. Then, a distributed adaptive protocol based on the decentralized PI observer is designed to guarantee the consensus of the underlying systems. Some sufficient existence conditions are given in terms of linear matrix inequalities (LMIs) for the decentralized PI observer and the fault tolerant consensus protocol. Note that H∞$$ {H}_{\infty } $$ performance index is employed to attenuate the influence of sensor faults and disturbances on state estimation and the consensus of the underlying systems. Finally, the effectiveness and superiority of the proposed method are demonstrated by an application example and a numerical example. [ABSTRACT FROM AUTHOR]