We discuss here a quick, simple, economic and ecofriendly method through a completely green route for the selective detection of Hg²⁺ in aqueous samples. Here we exploited the ability of chitosan to generate gold nanoparticles and subsequently to act as a stabilizer for the formed nanoparticles. When chitosan stabilized gold nanoparticles (CH-Au NPs) are interacted with Hg²⁺ a blue shift for its localized surface plasmon resonance absorbance (LSPR) band is observed. The blue shift is reasoned to be due to the formation of a thin layer of mercury over gold. A concentration as low as 0.01 ppm to a maximum of 100 ppm Hg²⁺ can be detected based on this blue shift of the CH-Au NPs. While all other reported methods demand complex reaction steps and costly chemicals, the method we reported here is a simple, rapid and selective approach for the detection of Hg²⁺. Our results also show that the CH-Au NPs have excellent selectivity to Hg²⁺ over common cations namely, Pb²⁺, Cd²⁺, Mn²⁺, Fe²⁺, Ag¹⁺, Ce⁴⁺, Ni²⁺, and Cu²⁺.