This paper presents a novel acoustic wave-based method for the detection of leakage in downhole tubing of offshore gas wells. The localization model is developed on the basis of analyzing the propagation model of leakage acoustic waves and the critical factors in localization. The proposed method is validated using experimental laboratory investigations that are conducted to locate tubing leakage by setting five holes at different positions on the tubing wall. A detection system is developed for the leakage acoustic waves in the tubing-casing annulus, where one acoustic sensor is installed at the annulus top. Laboratory experimental results show that the depth of downhole leakage can be effectively located by using the proposed localization model. The localization errors are kept at a very low level, and are mainly generated from extracting the characteristic time and calculating annular acoustic velocity. A case study focusing on an offshore gas well is presented to illustrate the feasibility of the proposed method, and to demonstrate that the proposed model can locate the liquid level and leakage points under field conditions. The test can be performed without interrupting the production of gas wells.