ZnO nanospheres were prepared by hydrothermal method using CTAB as protecting ligands. The purified ZnO nanospheres were functionalized using 3-aminopropyl-trimethoxysilane (APTMS) and made into core-shell nanostructures with in-situ reduction of Ag+ into silver nanoclusters. ZnO nanospheres act as the core while silver nanoclusters act as shell material resulting in the formation of ZnO@Ag core-shell nanostructures. The precursor ZnO nanospheres and ZnO@Ag core-shell nanostructures were well characterised structurally by UV-Visible, FT-IR, XRD, and TGA and morphologically by SEM and HR-TEM. The analysis confirms that Ag nanoclusters are attached to ZnO nanospheres with uniform distribution. The induced surface area of these hybrid core-shell structures with isolated nanoclusters on ZnO surface pointed towards the possibility of having better sensitivity as an excellent gas sensing material. The present investigation provided an easy synthetic platform for obtaining high surface area core-shell nanostructures which enhances interfacial compatibility between metal oxide core and metal shell by suitable functionalization for generating better gas sensing materials.