Traditional numerical techniques such as sliding mesh, dynamic grid mesh, and others, have many limitations in dealing with flow simulation with large-scale movement of solid boundaries; which is the case for complex-shaped hydraulic turbomachinery such as propellers, pumps and turbines. The immersed boundary (IB) method provides a new approach to solve the above limitations. Therefore, this study proposes an sharp-interface IB method based on the level-set function that is suitable for simulating the flow through turbomachinery with complex geometries. This method is applied to actual three-dimensional numerical simulations of high-Reynolds number propellers using an in-house computational fluid dynamics solver. The results show that the proposed method can provide comparatively accurate predictions of unsteady load coefficients within the propeller flow passage, and capture the correct propeller wake characteristics as well as the interaction between the propeller wake and free surface. This study aims at providing a theoretical basis and engineering reference for the application of the IB method in engineering numerical simulations.