Seawater moving in Earth's magnetic field causes secondary magnetic field fluctuations, which creates a magnetic signature. A laboratory experiment was conducted at the SUrge STructure Atmosphere INteraction (SUSTAIN) facility, to measure the magnetic signature of surface waves. We used a differential method, placing two Geometrics G-824 magnetometers at several locations on the outer tank walls, separated horizontally by one-half wavelength. This method effectively suppressed extraneous magnetic distortions, which both sensors should see simultaneously, and possible tank vibrations while doubling the magnetic signal of surface waves. The wave parameters used in this experiment were 2 m long waves with a 0.56 Hz frequency and 0.1 m amplitude. Three Senix ultrasonic sensors positioned on the top of the tank were used to measure wave elevation. Freshwater, salt water, and empty tank experiments were conducted to measure the magnetic difference between fresh and salt water. Additionally, the empty tank tests indicated that noise levels from the SUSTAIN facility are much smaller than the useful (differential) signal recorded in our fresh and salt water experiments. Spectral analysis of the magnetic signal shows the main peak at the wave frequency of 0.56 Hz and less pronounced higher frequency harmonics, which are due to non-linearity of shallow water surface waves. Our results suggest that the magnetic signature generated by surface waves were an order of magnitude larger than predicted by the traditional model (Podney 1975). Based on theoretical calculations, the discrepancy may come from the difference of magnetic permeability in water and air that is not accounted in the traditional model.