Yes- such a scheme is very easily implemented with the help of a stepper motor connected to a drum over which the measuring thread is wound as a single layer. The end of the thread is routed over a pulley and at the end of which is a heavy float connected to the thread via a load cell. The float is raised to a known datum and the "reset" as zero. Now the load cell will be reading the weight of the float. The stepper is started and slowly lowers the float - the steps are counted (S) till the load cell reading just starts to reduce, indicating that the float has touched the fluid. The stepping rate is very critical and should be free from jerks - as for every jerk you will disturb the load cell reading leading to false stoppages. In such an event a small DC motor with a rotary encoder works great. Here the feed is uniform and the resolution can be increased as much as you need.

Using the diameter of the drum and the number of steps S, the length paid out is easily calculated. Using this the "empty" volume and there after the filled volume are found.

However if the tank is quite long and laid horizontally, then you may have to take three readings - one at either end and one at middle to get more accurate readings. But in most of these longish tanks, it is natural to have compartments in which case one reading per compartment will be enough.

Raghu