This paper considers a failure diagnosis problem for discrete event systems subject to permanent sensor failures. A notion of diagnosability subject to permanent sensor failures is introduced with respect to a certain nondeterministic observation mask. For its verification, an aggregated Mealy automaton with a deterministic and state-dependent observation mask is defined. It is shown that the diagnosability of the aggregated Mealy automaton is equivalent to the diagnosability of the original system subject to permanent sensor failures. Then, a method for verifying the diagnosability of the aggregated Mealy automaton is presented. Moreover, the delay bound within which the occurrence of any failure string can be detected subject to permanent sensor failures is computed.