Ships carry over 80% of the world’s trade, and in the meantime, they cause severe air pollution. Nitrogen oxide (NOx) is one of the most difficult items to be treated among ship’s air pollutants. In this paper, a novel treatment of gaseous pollutants based on hydrodynamic cavitation is proposed and systematically investigated. In comparison with the bubbling reactor, the hydrodynamic cavitation reactor (HC reactor) expanded the gas-liquid contact area by more than 37.5 times through generating microbubbles (about 0.50 mm) filled with the nitric oxide mixture (Gas-Filled-Bubbles). The small space inside the Gas-Filled-Bubble facilitated collisions of gas molecules, and thus accelerated the rate of gas phase chemical reactions. Furthermore, the collapse of cavitation bubbles (Cavities) may result in highly reactive free radicals and microjets, and the microjets helped to enhance gas-liquid mass transfer. The HC reactor had a longer duration for NOx removal rate over 90% than the bubbling reactor. When 1.0 mg/L chlorine dioxide (ClO2) solution was used, the duration for NOx removal rate over 90% was 100 s in the HC reactor, whereas in the bubbling reactor the duration was 0 s. Comparatively high ClO2 concentration contributed to prolonged high NOx removal rate (≥90%) duration, however, the escape of ClO2 would lead to more nitrogen dioxide (NO2) production, and poor ClO2 utilization. The effects of the inlet and outlet pressures of the HC reactor on the denitrification effect were studied, and the cost-effectiveness of the proposed method was assessed. The results showed that the inlet pressure of 3.00 bar and the outlet pressure of 0.30 bar were reasonable options for HC reactor’s denitration when both cost benefit and application conditions were taken into account.