The exploration of underwater environments for applications like environmental monitoring, scientific research, and surveillance has propelled the significance of underwater wireless navigation. Light waves have emerged as a promising solution, offering the potential to achieve the required data rates and propagation speeds. However, underwater optical wireless navigation faces challenges, particularly limited range. This research investigates a novel FMCW (frequency-modulated continuous wave)-based photonic radar system’s efficacy in detecting underwater vehicles across diverse salinity levels and distances. Numerical simulation evaluations reveal distinct signal-to-noise ratios (SNR) and detected power peaks corresponding to varying salinity levels, demonstrating the system’s sensitivity. At 5 g/L salinity, the detected power peaked at −95 dBm, decreasing to −105 dBm at 15 g/L. SNR analysis indicates robust detection within a 4 m range, with challenges emerging at extended ranges and higher salinity. Despite these challenges, the system shows promise for near-range underwater navigation, contributing to sustainable marine exploration by enhancing the accuracy and efficiency of underwater monitoring systems. This advancement aligns with the goals of sustainable development by supporting the protection of marine ecosystems, promoting scientific understanding of underwater environments, and aiding in the sustainable management of marine resources.