Sheet flow driven by a near-breaking transient wave is numerically investigated using SedFoam, a two-phase Eulerian sediment transport model in the OpenFOAM framework. SedFoam resolves the full profile of sediment transport processes within the bottom boundary layer based on closures for intergranular stresses and fluid–particle interactions. Compared with large-scale wave flume data, good agreements are obtained for streamwise flow velocity profiles, sediment concentration profiles, and the sheet flow layer thickness. Model results show near-bed velocity and sediment profile evolution within the sheet flow layer. Intense sediment suspension trailing the wave crest generates stable density stratification that dampens near-bed turbulent kinetic energy and contributes to decreasing bed shear stress. Results suggest that the buoyant flux dominates turbulent kinetic energy dissipation after the passing of the wave crest, coinciding with the reduction of bed shear stress. The instantaneous upper bound of the sheet flow layer exists in different log-law regimes under the transient wave, giving rise to a near-bed velocity profile that is highly dependent on the variable sheet flow layer wall unit. The effect of the profile shape parameter on bedload sediment transport is studied where the bedload predicted using the time-varying optimal profile shape parameter yields good agreement compared to the directly modeled bedload. Modeled sediment transport rates demonstrate that reduced bed shear stress caused by density stratification limits bedload and results in a suspended load-dominant mode.