Able Seaman Joshua Cheetham stole a series of the high specification gadgets, which operate at underwater depths of 300 metres, while working as a storeman on warship HMS Kent.
A court martial heard the 26 year old had racked up debts after 'living outside his means' and resorted to selling the CWC SBS watches online for £300 to £500 each.
The dive watches have been key pieces of kit for specialist UK forces for the last 30 years and were described on the auction site as 'built for elite units of the British Forces, the Royal Marines and Special Boat Service'.
The hearing was told that AB Seaman made £1,642 by selling six watches looted from stores on the Type 23 frigate, which is based in Portsmouth.
He was finally caught in February 2021 when eBay buyers contacted the MoD to check the validity of the watches.
When the sailor's home was searched, officers also discovered Royal Navy-owned batteries as well as another watch.
AB Cheetham, a logistician, admitted two counts of theft - which stretched over a six month period - and one of fraud when interviewed by police.
The court heard he had been begun selling the watches in a bid to pay off his overdraft.
He has now been dismissed and sentenced to military prison for three months by a board at Bulford Military Court in Wiltshire.
Major James Eveleigh, prosecuting, told the hearing Cheetham had 'abused his position of trust' as it was part of his job as a storeman to buy the watches for the navy.
He said: ‘He obtained six new CWC SBS diving watches and the total value that he acquired was £1,642.
‘As part of the investigation, they searched his home address and found a watch and navy batteries worth £10.28.
‘On February 1 2021, he had ordered a further two watches but had no permission to do so. The additional order was to sell them if they arrived.
‘When interviewed, he admitted to taking some watches. This was a breach of trust and was a financial loss for the MOD.’
AB Cheetham's lawyer, Helen Easterbrook, said he had begun overspending and resorted to crime in a bid to fight his debts.
She said: ‘The reason was that he started to live outside his means.
‘He found himself in a complete mess and made a very bad decision.’
A Royal Navy Seaman salary is approximately £25,970 per year.
Sentencing him, Judge Robert Hill said: ‘You had a position of trust, of responsibility which you have abused.
‘The offending carried on for about six months. It only came to an end when customers from eBay started to make enquiries about whether they were genuine.
‘It was not by your own volition - it carried on until that point.’
Judge Hill concluded his crime was 'so serious', dismissal was 'inevitable'.
Cheetham was dismissed from the Navy and handed a three month custodial sentence of which he must serve 60 days. He must also pay compensation of £1,367.70.