The primary focus of this study is to reuse dredged clay (DC) with high water content as recycled construction material by stabilizing it with a ternary alkali-activated material (AAM) based on ground granulated blast-furnace slag, fly ash, desulfurization gypsum (GGBS-FA-DG). The mechanical properties of the stabilized DC using the ternary AAM were investigated through laboratory tests, and microstructure tests were performed to reveal the stabilization mechanism of the treated DC. The results revealed that the unconfined compressive strength (UCS) of the stabilized specimens was significantly affected by the initial water content of DC and decreased with the increasing initial water content. The UCS of the stabilized DC using the ternary AAM can be increased by 1.24–4.33 times compared to using the GGBS-FA binary AAM alone. The UCS of the stabilized DC first increased and then decreased as the DG content increased. The optimal DG content was 8% for the DC with an initial water content of 1.4–2.0 times the liquid limit (1.4–2.0wL). Scanning electron microscope (SEM) and X-ray diffraction (XRD) tests reveal that geopolymer gel produced by polymerization and C-(A)-S-H gel produced by hydration can contribute to cementation strength. Needle-like ettringite (AFt) generated by the activation FA by DG can promote a denser microstructure of the stabilized DC and thus further improve the strength.