A large-volume (4 cm3) monolithic CdZnTe detector was selected for a novel underwater γ-radiation sensing instrument for radioactivity measurements near the seabed. The focus of this paper was to characterize the detector to adapt to the challenges expected during underwater operation. Initially, its efficiency and energy resolution were determined experimentally. Then, two underwater laboratory experiments were utilized. The first compared the detector efficiency from measurements performed in the air and then underwater. A decrease in efficiency was observed for low energy γ-rays during the underwater measurement. The second experiment evaluated the sensitivity of the method in underwater detection of 40K. The results revealed the limitations of the detector in real-life measurement scenarios. Next, Monte Carlo simulations were performed, focusing on the marinization of the detector. Candidate materials were investigated for the manufacturing of the necessary underwater housing. From the analysis of the results and considering real-world challenges expected in the marine environment, an aluminum housing was found to be optimal for the instrument development. Finally, the most efficient placement of the instrument with regard to the surface of the seabed was determined considering the detection range and the efficiency of the setup. It was concluded that a horizontal placement was the most suitable one. The proposed CdZnTe instrument is expected to provide a novel solution for underwater radioactivity studies in deep ocean environments and operation under harsh conditions. The main advantages it can offer are: the good energy resolution and efficiency, which are necessary for efficient underwater radioactivity monitoring.