Genetically modified microorganisms (GMMs) can enable a wide range of important applications including environmental sensing and responsive engineered living materials. However, containment of GMMs to prevent environmental escape and satisfy regulatory requirements is a bottleneck for real-world use. While current biochemical strategies restrict unwanted growth of GMMs in the environment, there is a need for deployable physical containment technologies to achieve redundant, multi-layered and robust containment. We developed a hydrogel-based encapsulation system that incorporates a biocompatible multilayer tough shell and an alginate-based core. This deployable physical containment strategy (DEPCOS) allows no detectable GMM escape, bacteria to be protected against environmental insults including antibiotics and low pH, controllable lifespan and easy retrieval of genomically recoded bacteria. To highlight the versatility of DEPCOS, we demonstrated that robustly encapsulated cells can execute useful functions, including performing cell-cell communication with other encapsulated bacteria and sensing heavy metals in water samples from the Charles River.