A deep-sea construction vessel is used to instal underwater parts of an off-shore oil drilling platform at the designated locations on the seafloor. By using extended Hamilton's principle, a nonlinear PDE system governing the laterallongitudinal coupled vibration dynamics of the deep-sea construction vessel consisting of a time-varying-length cable with an attached item is derived, and it is linearized at the steady state generating a linear PDE model, which is extended to a more general system including two coupled wave PDEs connected with two interacting ODEs at the uncontrolled boundary. Through a preliminary transformation, an equivalent reformulated plant is generated as a 4 × 4 coupled heterodirectional hyperbolic PDE-ODE system characterized by spatially-varying coefficients on a time-varying domain. To stabilize such a system, an observerbased output-feedback control design is proposed, where the measurements are only placed at the actuated boundary of the PDE, namely, at the platform at the sea surface. The exponential stability of the closed-loop system, boundedness and exponential convergence of the control inputs, are proved via Lyapunov analysis. The obtained theoretical result is tested on a nonlinear model with ocean disturbances, even though the design is developed in the absence of such real-world effects.