A giant magneto-resistive (GMR) transducer for reading data signals magnetically recorded on tape includes a GMR sensor and a separation structure formed on a front edge of the GMR sensor. The GMR sensor reads data signals magnetically recorded on a tape located at a head-tape interface. The separation structure physically separates the GMR sensor from the head-tape interface. The separation structure includes at least one film formed of at least one of non-magnetic and ferromagnetic materials such that the separation structure isolates the GMR sensor from physical contact with the tape at the head-tape interface while maintaining the ability of the GMR sensor to read data signals magnetically recorded on the tape even though the GMR sensor is physically separated from the tape at the head-tape interface. The separation structure may include an under-layer film and an isolation film. The GMR transducer is fabricated by a series of fabrication steps.