This manuscript investigates the electronic structures, spectral properties, and photoionization processes of the confined atomic system. For this purpose, a relativistic methodology employing the Dirac–Coulomb Hamiltonian within the context of relativistic configuration interaction is suggested, utilizing independent particle basis wavefunctions. The key idea of this approach is to place the atom inside a Gaussian potential, which gives a realistic description of the spatial confinement in quantum dots due to a smooth change at the quantum dot boundaries and has a finite range and depth for the spatial confinement. As a result, the local central potential is modified, which is determined by a self-consistent process. The solutions to the Dirac equation, incorporating the aforementioned central potential, yield both the continuous and bound state wave functions. The photoionization process is determined through the application of the distorted wave approach within the context of relativistic Dirac theory. As an application, the electronic structures of the confined Li atom, including energies, ionization potentials, transition rates, and photoionization dynamical properties such as wave functions, cross sections, and photoelectron angular distributions, are systematically investigated within the dipole approximation for a wide range of potential depths and confining radii. A systematic comparison of the present outcomes is made with other available results. The present study is not only meaningful for fundamental research in atomic and molecular physics, but also has implications for a range of disciplines, such as nanochemistry, materials science, and other related fields.