A rotation sensor system is included with a surgical instrument having an outer tube, an inner rotating member rotatably disposed within the outer tube and a handpiece coupled to proximal ends of the outer tube and the inner rotating member. The rotation sensor system includes a magnetic member provided on the inner rotating member near the proximal end of the inner rotating member, a magnetically permeable member provided on the outer tube near the proximal end of the outer tube, and a sensor provided on the handpiece to sense magnetic flux of the magnetically permeable member adjacent to the sensor. This sensed magnetic flux can be used to determine the rotational position of the inner rotating member relative to the outer. tube. Such information can be used to control the position of the cutting member relative to the cutting window when a surgeon stops rotating the inner rotating member.
