Research on the underwater robotics has attracted the interest of many researchers over the years. The primary reasons are the need to perform underwater intervention tasks that are dangerous for a diver and the need to perform underwater survey tasks that last for longer periods of time. Unmanned underwater vehicles can be divided into two categories. Most of the systems, today, that require a certain level of precision and dexterity are built as Remotely Operated Vehicles (ROV). On the other hand, the systems that perform repetitive tasks are configured as Autonomous Underwater Vehicles (AUV). The objective of the thesis is to design a novel, cost-efficient, and fault-tolerant ROV that can hover and be used for shallow water investigation. In order to reduce the cost, the numbers of thrusters are minimized and internal actuators are used for steering the vehicle and stability in hovering mode. Also, the design is planned to be open for modification for further improvements that will enable the use of the vehicle for intervention tasks and studies. In this work, previously developed unmanned underwater vehicles are reviewed. Following this, the conceptual designs are created for the underwater vehicle and internal actuator designs are developed. Designed mechanisms are modeled in SolidWorks© and transferred to MATLAB© Simulink for hovering-mode control studies. Afterwards, to verify the simulation results, experiments are conducted with a seesaw mechanism by using LabVIEW© programming. Finally, results are given, discussed and future works are addressed.