The Stover Canal near Newton Abbot was built by James Templer of Stover House to serve the ball clay industry.
In 1999 the Stover Canal Society was formed with the intention of restoring the scrub-filled waterway for fishing, rowing and wildlife.
Teignbridge District Council has now sub-leased the land to the Stover Canal Trust, paving the way for full restoration plans to be drawn up.
The trust includes representatives from the canal society, local councils and other interested parties.
For more than a century the canal transported clay and minerals from the Bovey Basin and granite from quarries on Dartmoor.
The granite trade was relatively short-lived, lasting less than 40 years, but the canal continued to serve the clay industry until 1937.