The department says the anchor was found by an excavation crew working at a demolition site at HMC Dockyard on the Halifax harbour last Tuesday.
It says after consulting with a naval expert and comparing the anchor to documents and photos, it is believed to have been attached to HMCS Niobe, one of Canada's earliest navy vessels.
The anchor is about four metres tall and weighs roughly 2,000 pounds.
HMCS Niobe was purchased from Portsmouth, England, and arrived in Halifax on Oct. 21, 1910.
The Defence Department says the discovery comes just before an annual celebration for HMCS Niobe scheduled for Tuesday.