Airborne LiDAR bathymetry (ALB) has been shown to have the ability to retrieve water turbidity using the waveform parameters (i.e., slopes and amplitudes) of volume backscatter returns. However, directly and accurately extracting the parameters of volume backscatter returns from raw green-pulse waveforms in shallow waters is difficult because of the short waveform. This study proposes a new accurate and efficient method for the remote sensing of suspended sediment concentrations (SSCs) in shallow waters based on the waveform decomposition of ALB. The proposed method approaches raw ALB green-pulse waveforms through a synthetic waveform model that comprises a Gaussian function (for fitting the air-water interface returns), triangle function (for fitting the volume backscatter returns), and Weibull function (for fitting the bottom returns). Moreover, the volume backscatter returns are separated from the raw green-pulse waveforms by the triangle function. The separated volume backscatter returns are used as bases to calculate the waveform parameters (i.e., slopes and amplitudes). These waveform parameters and the measured SSCs are used to build two power SSC models (i.e., SSC (C)-Slope (K) and SSC (C)-Amplitude (A) models) at the measured SSC stations. Thereafter, the combined model is formed by the two established C-K and C-A models to retrieve SSCs. SSCs in the modeling water area are retrieved using the combined model. A complete process for retrieving SSCs using the proposed method is provided. The proposed method was applied to retrieve SSCs from an actual ALB measurement performed using the Optech Coastal Zone Mapping and Imaging LiDAR in a shallow and turbid water area. A mean bias of 0.05 mg/L and standard deviation of 3.8 mg/L were obtained in the experimental area using the combined model.