A novel vertical augmentation channel housing a direct-drive cross-flow turbine, with nozzles on both the sides of the turbine, was designed and an optimized configuration was obtained. The geometries of the guide nozzle and the front nozzle were optimized under steady flow conditions. The performance of the cross-flow turbine was analyzed using commercial computational fluid dynamics (CFD) code ANSYS-CFX. The optimized design was then evaluated as a wave energy converter both experimentally and computationally. The waves in the numerical wave tank (NWT) were generated using a piston type wave-maker. The optimized design gave a maximum output power of 13.2 W and an efficiency of 48.31% at a wave height of 0.2 m and wave period of 2.75 s for a rotational speed of 35 rpm. The difference between numerical and experimental efficiencies was within 3.5%. In addition to this, particle image velocimetry was used to study the flow characteristics in the augmentation channel and the turbine. The results show that the CFD code captures the flow in the augmentation channel and around the turbine accurately. The optimized design, which occupies less space than other wave energy converters, can be used to efficiently harness energy from the waves.