Plans for a private foot-passenger ferry service from downtown Nanaimo to downtown Vancouver are one step closer after the city and Island Ferry Services reached an agreement on a 20-year lease.

The company's director of marine operations, Dave Marshall, says Island Ferry will pay $52,000 a year for the prime downtown waterfront location near the terminal used by BC Ferries for its Gabriola Island service.

"This is a good day. This is significant. It's the conclusion of work that has been going on for a number of months," said Marshall

Marshall says the foot-passenger service will be up and running by March 2015. The company is proposing to run two catamarans on the route capable of travelling at 37 knots, with six daily round trips taking about 68 minutes each way.

The Vancouver terminal for the route has not been announced.

Previous efforts to run a foot-passenger ferries between Nanaimo and Vancouver have failed, in part because of low ridership levels, and expensive engine failure, and tax bills.