Understanding fluid mechanics concepts, particularly conservation of mass and continuity equations, remains challenging for engineering students due to the abstract nature of these principles. Traditional teaching methods often rely on theoretical explanations without adequate hands-on experience. This study presents the development and technical evaluation of a novel Fluid Exchange System (FES) designed as an educational tool to enhance student understanding of conservation of mass and continuity equation concepts through interactive experimentation. The FES was designed with variable pipe sizes, adjustable flow rates, supply and outlet tanks, and intermediate exchange tanks for volume measurements. Comprehensive technical testing was conducted to evaluate device functionality, measurement accuracy, and educational potential. Performance parameters including flow rate stability, volume measurement precision, and system reliability were assessed through controlled experiments. Technical testing demonstrated that the FES successfully maintains stable flow rates across different pipe configurations with ±5.5 % accuracy. The system effectively demonstrates conservation of mass principles through measurable volume changes in exchange tanks. Flow rate variations of 0.5-3.5 L/min were achieved with corresponding continuity equation validations showing R² > 0.95 correlation with theoretical predictions. The FES shows significant potential as an effective educational tool for teaching fluid mechanics concepts. The device's ability to provide quantitative, real-time demonstrations of conservation of mass and continuity equations addresses key pedagogical challenges in engineering education. Future implementation in classroom settings is warranted to evaluate learning outcomes and student engagement.