Most plywood designed for water exposure is manufactured with waterproof glue, but the exterior of the plywood still needs to be sealed. Moisture will penetrate and swell even the best plywood and over time the plywood core will begin to separate. The key to plywood preservation is sealing it, which you can do with a surface coating or a penetrating oil. It should be noted, though, that without regular maintenance, plywood will loose some or all of its water resistance. And no matter what you put on plywood, it cannot be permanently submerged in water without deteriorating.
There are several types of surface coatings that will waterproof plywood, including polyurethane, urethane, varnish and shellac. These products contain resins, solvents, drying oils and even plastics that sink into the plywood and harden. There are also marine paints containing similar chemicals that will waterproof plywood. All of these products can be brushed or sprayed on, but the easiest and best way to waterproof plywood to spray the sealent on. Spraying provides better coverage to corners and edges. It also atomizes the particles so they penetrate better than if you were to brush the coating on.
Fill a spray gun tank with the waterproofing product. It can be an airless spray gun or a pressurized spray gun; it makes no difference. It does matter, however, what kind of tip you use on the spray gun. Use a "paint" nozzle or tip on the end. Waterproofing products are thick, and you want to liberally coat the plywood. Paint nozzles or tips on airguns provide a high volume of product to the plywood. Other tips, such as lacquer tips, do not provide sufficient volume. They also clog and are inefficient for spraying heavier products.
If the plywood has not been installed, place it across sawhorses. Liberally soak the plywood with the product by spraying it until it is consistently wet. Make sure you spray the sides, edges and all corners. If the plywood is already installed vertically, spray it as heavily as you can without getting too many drips or runs. Let the plywood dry according to the coating manufacturer's directions. If you're working on sawhorses, flip the plywood over, spray it again and let it dry. At this point, the plywood is relatively waterproof, but for even more protection, repeat the process. You don't need to sand between coats unless you want a glassy, smooth finish on the plywood.
Penetrating Oils and Products
There are several types of penetrating oils and products that can also be applied to plywood for waterproofing. Among these are boiled linseed oil, which is the most common, and products referred to as a "water seal," which are penetrating oils combined with a drying agent. Apply these products the way you would a surface coating, using a spray gun fitted with a paint tip. They take longer to dry, but penetrate deeper than surface coatings. The beauty of using penetrating oils and products is that you can easily reapply them at regular intervals, such as every six months.