To solve the localization precision descending about ME algorithm when the cut angles between partial sensor pairs are too small or big in a multi-sensor system, a multi-sensor management passive localization algorithm based on virtual measurement transform (VMT) is presented. The effect of cut angle on the GDOP is analyzed in global coordinate system firstly, and the cut angle restriction relationship is obtained from which the better localization precision of dual-sensor system can be achieved. Secondly, the VMT localization algorithm is presented when certain sensor pairs do not satisfy above restriction relationship, which can deploy sensor in an optimal way by means of sensor space management. The principle and characteristics of the algorithm are analyzed, especially the precision of intersection which after and before transform are compared from the perspective of GDOP. Simulation results indicate that the performance of VMT algorithm excels that of ME algorithm remarkably, which verifies it and the important role that sensor management plays in multi-sensor passive localization.