A novel model-based approach to design a full-order state observer for estimating the states of a three-tank process has been attempted in this research study. State estimation has been a methodology that integrates the prediction from exact models pertaining to the system and achieves consistent estimation of the non-measurable variables. This study has attempted to develop a full-order observer for estimation of non-measurable variables of the considered three-tank process control system. Neural observer is designed with the nonlinear state update equation that is structured as the neural network employing radial basis function (RBF) model. Also, nonlinear full-order state observer is designed based on a new recursive likelihood synthesizer (RLS) of the extended Kalman filter (EKF) and classic unscented Kalman filter (UKF) and finally the states are estimated. The likelihood synthesizer determines the covariance and Kalman gains so as to match the real-time process measurements. Three-tank process system (TTPS) is represented by its mathematical model and the developed state estimation techniques are applied for estimating the non-measurable variables. Likelihood synthesizer tends to evaluate the covariance of the initial states and simulation tests confirm the attainment of better results using the new nonlinear filtering techniques. RBF neural observer has resulted in an ARMSE of 4.1629 × 10–3, 0.3963 × 10–3 and 0.1085 × 10–3 for the measured heights h1, h2 and h3, respectively. The new RLS-EKF observer with its recursive determination of the maximum likelihood has attained ARMSE of 2.1982 × 10–6, 0.1512 × 10–6 and 0.0261 × 10–7 for the measured heights h1, h2 and h3, respectively. This novel RLS-EKF has proved to be highly robust and has higher precision than the RBF neural observer and UKF technique as applied for the TTPS model.