A facile synthetic methodology for the deposition of different concentrations of Ag nanoparticles (AgNPs) on α-Ni(OH)2 sheets (α-Ni1(OH)2-Ag0.5, α-Ni1(OH)2-Ag1, α-Ni1(OH)2-Ag2, and α-Ni1(OH)2-Ag3) is reported using N-[3-(trimethoxysilyl)propyl]diethylenetriamine (TPDT) silane. The TPDT aminosilane facilitates the formation of α-Ni(OH)2 sheets and reduces the Ag+ precursor to AgNPs, leading to the deposition of AgNPs on α-Ni(OH)2 sheets. UV-vis absorption spectroscopy, transmission microscopy analyses, X-ray photoelectron spectroscopy, X-ray diffraction, and attenuated total reflectance-Fourier transform infrared spectroscopy techniques were used to characterize the prepared α-Ni1(OH)2-Ag0.5-3 composite materials. High-angle annular dark-field scanning transmission electron microscopy-energy-dispersive X-ray spectroscopy mapping images and scanning electron microscopy-energy-dispersive X-ray spectroscopy mapping images were recorded to understand the α-Ni1(OH)2-Ag composite sheet materials. The optical sensing property of α-Ni1(OH)2-Ag0.5-3 composite materials toward toxic Hg2+ ions were investigated using a UV-vis absorption spectroscopy technique. The α-Ni1(OH)2-Ag2 composite material showed selective sensing behavior.