  Polarization encoding quantum key distribution has been proven to be a
reliable method to build a secure communication system. It has already been
used in inter-city fiber channel and near-earth atmosphere channel, leaving
underwater channel the last barrier to conquer. Here we demonstrate a
decoy-state BB84 quantum key distribution system over a water channel with a
compact system design for future experiments in the ocean. In the system, a
multiple-intensity modulated laser module is designed to produce the light
pulses of quantum states, including signal state, decoy state and vacuum state.
The classical communication and synchronization are realized by wireless
optical transmission. Multiple filtering techniques and wavelength division
multiplexing are further used to avoid crosstalk of different light. We test
the performance of the system and obtain a final key rate of 245.6 bps with an
average QBER of 1.91% over a 2.4m water channel, in which the channel
attenuation is 16.35dB. Numerical simulation shows that the system can tolerate
up to 21.7dB total channel loss and can still generate secure keys in 277.9m
Jelov type 1 ocean channel.
