[Alan Anderson]

That sensor has four wires, with colors Brown, Blue, Black, and White. Brown needs to be connected to 12 volts and Blue goes to "ground"/common. A VRM output would probably be appropriate. Black and White are essentially switches to ground, only one of which is active at a time. Black activates when the sensor is not seeing an object; White activates when it is. Only one of them is necessary, and should be connected to the SIGnal pin of a Digital Input port.

It is a light source and light detector pointing in the same direction. It senses when something is in front of it and reflecting the light.