The fully automated vessels are designed to be "net positive" by running on green hydrogen and collecting microplastics, the Department for Transport (DfT) said.
A fleet could secure 27 tonnes of CO2 emissions in the first year of operation, according to the DfT.
The idea has been hailed by Transport Secretary Grant Shapps as being a great example of how Britain can start “building back greener”.
Another project awarded Government funding is developing electric boat chargepoints connected to offshore wind turbines.They would operate in a similar way to electric car chargers, with sailors plugging in, charging their vessel and sailing away.
The use of renewable energy in this way could be equivalent to taking more than 62,000 cars off the road, the DfT said.
The competition winners were announced as part of London International Shipping Week.
Transport Secretary Grant Shapps said: "As a proud island nation built on our maritime prowess, it is only right that we lead by example when it comes to decarbonising the sector and building back greener.
"The projects announced today showcase the best of British innovation, revolutionising existing technology and infrastructure to slash emissions, create jobs and get us another step closer to our decarbonisation targets."
Dhruv Boruah, founder and chief executive of Oceanways, which is developing the submarines, said: "Time is running out and it is imperative we don't settle for 1% more efficiency in an existing system, but instead radically rethink to create innovative solutions."
Meanwhile the UK's greenest cruise terminal will open at the Port of Southampton on Wednesday.
The Horizon Cruise Terminal uses solar panel roofing and charges ships with clean energy.
The £55 million facility lets cruise ships connect to the National Grid, thereby reducing the amount of time they need to run their engines at port.
Maritime minister Robert Courts said: "Building state-of-the-art green infrastructure at cruise terminals helps us move towards cleaner cruising, creating more spaces for these ships to dock and putting us on track to hit net zero by 2050."