Estimating the position of a moving magnet becomes challenging when the application involves a ferromagnetic environment. The movement of the magnet magnetizes and demagnetizes the ferromagnetic surroundings and creates significant hysteresis in the magnetic field versus position relationship. This relationship can no longer be represented by an algebraic mathematical function. This paper presents a position estimation system that utilizes various models to represent the hysteresis behavior, including an interacting multiple model approach and a Preisach model. The developed position estimation system is evaluated on a large hydraulic actuator used in mobile construction vehicle applications. Experimental results show that an unscented Kalman filter using the Preisach hysteresis model can provide a more accurate position estimate by accounting for the significant hysteresis.