The theory and simulation of fully-nonlinear waves in a truncated two-dimensional wave tank in time domain are presented. A piston-type wave-maker is used to generate gravity waves into the tank field in finite water depth. A damping zone is added in front of the wave-maker which makes it become one kind of absorbing wave-maker and ensures the prescribed Neumann condition. The efficiency of nmerical tank is further enhanced by installation of a sponge layer beach (SLB) in front of downtank to absorb longer weak waves that leak through the entire wave train front. Assume potential flow, the space- periodic irrotational surface waves can be represented by mixed Euler- Lagrange particles. Solving the integral equation at each time step for new normal velocities, the instantaneous free surface is integrated following time history by use of fourth-order Runge- Kutta method. The double node technique is used to deal with geometric discontinuity at the wave- body intersections. Several precise smoothing methods have been introduced to treat surface point with high curvature. No saw-tooth like instability is observed during the total simulation.The advantage of proposed wave tank has been verified by comparing with linear theoretical solution and other nonlinear results, excellent agreement in the whole range of frequencies of interest has been obtained.