It once carried coal from Lough Erne to Lough Neagh, but closed to navigation in 1931. Now part of the cross-border Ulster Canal - one of only two in Ireland - is to be restored and reopened to boat traffic following years of campaigning.
A 2.5km stretch of the canal between Lough Erne and the International Scout Centre at Castle Saunderson on the Cavan-Fermanagh border will be redeveloped at a cost of approximately £1.5m.
Work is due to start in April this year and should be completed within 12 months. It will involve dredging a 2km section of the Erne River and constructing a new navigation arch at Derry- kerrib Bridge to accommodate boat traffic.
Planning approvals are in place from the relevant authorities in the two jurisdictions and much of the preparatory work has already taken place. The Ulster Canal is one of only two man-made waterways to cross the border, the other being the Shannon-Erne waterway which was successfully reopened in the 1990s.
Originally opened in 1841, the Ulster Canal was the last major waterway built in Ireland, passing through counties Fermanagh, Cavan, Monaghan and Tyrone. In 2007, the North South Ministerial Council approved in principle the reopening of the south eastern Lough Erne to Clones section of the canal.
Nigel Russell, director of Technical Services with the cross-border body Waterways Ireland, which will undertake the work, said a proposal in 2006 to restore the entire length of the Ulster Canal was costed at E180m.
Another proposal in 2007 to restore a 13km section from Clones to Lough Neagh had to be shelved. The budget for the current project has come from the authorities in the Republic of Ireland.
Welcoming the development, Culture, Arts and Leisure Minister Carál Ní Chuilín said: "This is a welcome development which will help to unlock the tourism potential of the entire region. The opening up of the Shannon-Erne Waterway in the 1990s was a major boost for the area and this restoration project will undoubtedly create a range of new tourist and community business opportunities.
"This investment will be warmly received in an area which traditionally has suffered from deprivation and stagnation.
"There is undoubted potential in water-based tourism and the restoration of the Ulster Canal will open up a range of opportunities for the towns and villages along its path. It will also add further to the appeal of the Castle Saunderson International Scout Centre.
"This development will also benefit cross-border tourism and lead to even greater interaction between local communities. I look forward to work commencing on this stretch of the Ulster Canal in the not too distant future."
The last major waterway to be built in Ireland, the Ulster Canal was opened in 1841 and cut a swathe through four counties — Fermanagh, Cavan, Monaghan and Tyrone — to link Lough Neagh with the Erne system. The canal ran for 74 km (46 miles) and had 26 locks along its length. However, the venture proved to be a commercial failure and was closed in 1931.