In recent years the monitoring of structural behavior through acquisition of vibrational data has become common practice. In addition, recent advances in sensor development have made the collection of diverse dynamic information feasible. Other than the commonly collected acceleration information, Global Position System (GPS) receivers and non-contact, optical techniques have also allowed for the synchronous collection of highly accurate displacement data. The fusion of this heterogeneous information is crucial for the successful monitoring and control of structural systems especially when aiming at real-time estimation. This task is not a straightforward one as measurements are inevitably corrupted with some percentage of noise, often leading to imprecise estimation. Quite commonly, the presence of noise in acceleration signals results in drifting estimates of displacement states, as a result of numerical integration. In this study, a new approach based on a time domain identification method, namely the Unscented Kalman Filter (UKF), is proposed for correcting the "drift effect" in displacement or rotation estimates in an online manner, i.e., on the fly as data is attained. The method relies on the introduction of artificial white noise (WN) observations into the filter equations, which is shown to achieve an online correction of the drift issue, thus yielding highly accurate motion data. The proposed approach is demonstrated for two cases; firstly, the illustrative example of a single degree of freedom linear oscillator is examined, where availability of acceleration measurements is exclusively assumed. Secondly, a field inspired implementation is presented for the torsional identification of a tall tower structure, where acceleration measurements are obtained at a high sampling rate and non-collocated GPS displacement measurements are assumed available at a lower sampling rate. A multi-rate Kalman Filter is incorporated into the analysis in order to successfully fuse data sampled at different rates.