This paper describes a low-cost real-time GPS/INS integrated system based on a field programmable gate array (FPGA) platform and its performance in an urban environment. The system is built on the Alterapsilas Nios II soft-core processor. The embedded software is implemented on the embedded configurable operating system (eCos). The FPGA approach can shorten the research and development period. Its reprogrammable hardware configuration represents a system design methodology of lower risk. It also allows maximum flexibility, being able to integrate a wide range of GPS and INS sensor packages. Many tests have been conducted in various environments, including suburban, a car parking building, highways, country roads, forested mountain area, in tunnels, under bridges, and in urban canyons. The results have demonstrated the functionality of the system including, the stability and accuracy of the time synchronisation mechanism, the performance of the hardware and software architecture, as well as the accuracy of the algorithm. This paper presents the results of the test in Sydney city in real traffic conditions. Severe GPS outages frequently occurred during the test. The results show that the system can bridge all the GPS outages reasonably well even in the heart of the city where GPS signals were completed blocked by the high buildings.