There are different ways to measure diameter.

If the diameter is small enough, it can be covered by one laser micrometer (sketch above, left). For big diameters, two laser micrometers can be combined (sketch above, right). The diameter is calculated by adding the distance between the sensor measurement fields and the two measurement values.

If still larger diameters have to be measured, triangulation sensors may be used. The laser beam has to be adjusted to point perpendicular on the turning axis of the object.
 

In case you don't find the application sketch you need, please ask us !