In this work, hydrophilic silver nanoparticles (AgNPs), bifunctionalized with citrate (Cit) and L-cysteine (L-cys), were synthesized. The typical local surface plasmon resonance (LSPR) at λ = 400 nm together with Dynamic Light Scattering (DLS) measurements (<2R> = 8 ± 1 nm) and TEM studies (Ø = 5 ± 2 nm) confirmed the system nanodimension and the stability in water. Molecular and electronic structures of AgNPs were investigated by FTIR, SR-XPS, and NEXAFS techniques. We tested the system as plasmonic sensor in water with 16 different metal ions, finding sensitivity to Hg in the range 1-10 ppm. After this first screening, the molecular and electronic structure of the AgNPs-Hg conjugated system was deeply investigated by SR-XPS. Moreover, in view of AgNPs application as sensors in real water systems, environmental safety assessment (ecosafety) was performed by using standardized ecotoxicity bioassay as algal growth inhibition tests (OECD 201, ISO 10253:2006), coupled with determination of Ag release from the nanoparticles in fresh and marine aqueous exposure media, by means of ICP-MS. These latest studies confirmed low toxicity and low Ag release. Therefore, these ecosafe AgNPs demonstrate a great potential in selective detection of environmental Hg, which may attract a great interest for several biological research fields.