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 an inter-city fiber channel and near-Earth atmosphere channel, leaving an 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. Classical communication and synchronization are realized by wireless optical transmission. Multiple filtering techniques and wavelength division multiplexing are further used to avoid cross talk of different lights. We test the performance of the system and obtain a final key rate of 245.6 bps with an average quantum bit error rate of 1.91% over a 2.4 m water channel, in which the channel attenuation is 16.35 dB. Numerical simulation shows that the system can tolerate up to 21.7 dB total channel loss and can still generate secure keys in 277.9 m Jerlov type I ocean channel.