Oil and gas companies are increasingly being forced to conduct their sub-sea pipeline inspections in increasingly more hostile and deeper waters. Typically, Remotely Operated Vehicles (ROV) are used for sub-sea pipeline inspections and these are controlled by experienced ROV operators from a surface support vessel, which tend to make ROV operations costly. Conversely, an Autonomous Underwater Vehicle (AUV) can perform sub-sea pipeline inspections without the need for a human operator. This paper sets-out to describe the development of a novel Hybrid AUV (HAUV) system, composed of two unmanned vehicles and designed specifically for sub-sea pipeline inspection. The first vehicle is a compact Unmanned Surface Vehicle (USV), which tracks a sub-sea pipeline from the sea surface. The second vehicle is a HAUV, which is connected to the USV via a fibre optic tether. Both vehicles operate together to automatically inspect sub-sea pipelines. The complete system is controlled by a remote control station on the surface. At this early stage of development, its capability is limited due to its size and battery power source but lab-scale units have been developed and have undergone field testing. Our team study is ongoing and endeavours to refine the HAUV system-capabilities enabling us to offer a cost-effective approach for sub-sea pipeline inspection in the near future.