Fisheries Minister Keith Ashfield made the announcement today while visiting the lighthouse in Ferryland, about 75 kilometres south of St. John's.
While the town will have ownership of the lighthouse under the agreement, the coast guard will continue to operate and maintain the light inside.
The lighthouse was built in 1870 to guide ships sailing by the area's rocky shores.
It was staffed until 1970, when it became automated.
It was one of about 500 active lighthouses declared by Ottawa in 2010 to be "surplus" to its needs.