The recently reported Type II Gamma-ray Burst (GRB) 200826A challenges the collapsar models by questioning how they can generate a genuinely short duration of the event. This paper proposes that the burst can originate from the collapse of a Thorne-Zytkow-like Object (TZlO). The TZlO consists of a central neutron star (NS) with a dense white dwarf (WD) material envelope and a disk, which are formed as the aftermath of a WD-NS coalescence. We found the collapse of such a TZlO can naturally explain the short duration of GRB 200826A. Furthermore, the collapse can produce a magnetar as the central object, which provides additional energy injection via magnetic dipole radiation to the ejected WD materials, causing a bump-like feature in the optical band and a shallow decay of the X-ray band. The disk wind shell induced by the TZlO at a large radius also interacts with the ejected materials, which explains the ``supernova bump observed at $sim$ 28 days.