Future smart ocean applications require long distance and reliable communications to connect underwater sensors/robots with remote surface base stations. It is challenging to achieve such goal due to the harsh and dynamic underwater acoustic channel. While Multiple-Input and Multiple-Output (MIMO) technique can enhance reliability and transmission range, it is difficult to place multiple acoustic transducers on one single underwater device due to the large wavelength. Although the cooperative MIMO technique that let multiple underwater devices form a virtual MIMO system could solve the issue, it was impossible to synchronize the distributed underwater devices due to the extremely large and dynamic propagation delay of acoustic waves. To this end, this paper proposes an underwater cooperative MIMO communication mechanism, which is based on a hybrid acoustic and Magnetic Induction (MI) technique. The inter-node synchronization problem can be perfectly solved by using the MI technique so that the distributed acoustic transducers can cooperatively form narrow beams for long distance underwater communications. The synchronization time and errors are significantly reduced since MI has negligible signal propagation delays. To quantitatively analyze the improvement, the closed-form expressions of the synchronization error, signal-to-noise ratio (SNR), effective communication time, and throughput of the proposed system are rigorously derived. The proposed hybrid system is implemented in a software-defined testbed under the beamforming and space-time coding scheme. Through both numerical analysis and real-world experiments, the paper shows that the proposed hybrid cooperative MIMO mechanism achieves much lower bit error rate and synchronization error than the conventional acoustic systems.