Differences between conventional sonar and Multiple-Input Multiple-Output (MIMO) sonar systems arise in achieving high angular and range resolution. MIMO sonar uses Matched Filtering (MF) with well-correlated transmitted signals to enhance spatial resolution by obtaining virtual arrays. However, imperfect correlation characteristics yield high sidelobe values, which hinder accurate target localization in underwater imagery. To address this, a Compressed Sensing (CS) method is proposed by reconstructing echo signals to suppress correlation noise between orthogonal waveforms. A shifted dictionary matrix and a deterministic Discrete Fourier Transform (DFT) measurement matrix are used to multiply received echo signals to yield compressed measurements. A sparse recovery algorithm is applied to optimize signal reconstruction before joint transmit–receive beamforming forms a 2D sonar image in the angle-range domain. Numerical simulations and lake experimental results confirm the effectiveness of the proposed method, by obtaining a lower sidelobe sonar image under sub-Nyquist sampling rates as compared with other approaches.