Atomically transparent vertically aligned ZnO-based van der Waals material have been developed by surface passivation and encapsulation with atomic layers of MgO using materials by design; the physical properties investigated. The passivation and encapsulation led to a remarkable improvement in optical and electronic properties. The valence-band offset $Delta E_v$ between MgO and ZnO, ZnO and MgO/ZnO, and ZnO and MgO/ZnO/MgO heterointerfaces are determined to be 0.37 $pm$0.02, -0.05$pm$0.02, and -0.11$pm$0.02 eV, respectively; the conduction-band offset $Delta E_c$ is deduced to be 0.97$pm$0.02, 0.46$pm$0.02, and 0.59$pm$0.02 eV indicating straddling type-I in MgO and ZnO, and staggering type-II heterojunction band alignment in ZnO and the various heterostructures. The band-offsets and interfacial charge transfer are used to explain the origin of $n$-type conductivity in the superlattices. Enhanced optical absorption due to carrier confinement in the layers demonstrates that MgO is an excellent high-$kappa$ dielectric gate oxide for encapsulating ZnO-based optoelectronic devices.
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