The decision has resulted in the slashing of security costs of approximately £90,000 a year that had threatened to become an "unacceptable burden on the service."
Regional Development Minister Conor Murphy told the Stormont Assembly on Monday that security checks have already been stopped on the service.
Mr Murphy also said he recently met with Minister of Enterprise, Trade and Investment Arlene Foster to discuss the ferry and that he has discussed the possibilities for cross-border funding with Republic of Ireland Transport Minister Noel Dempsey.
But Mr Murphy expressed disappointment that despite the clamour of various elected representatives in Donegal in support of the ferry there was no representation from the Dublin Government at a round-table meeting of stakeholders at the Magilligan terminal last month 2009 to examine possible options.
"Although we did not manage to secure any attendance on their part at the round-table meeting, I have noticed that some Donegal members of the Government parties, particularly those from Inishowen, are vociferous about what should be done.
"However, they have not been able to bring their influence to bear on the Government TDs in the Dáil or get those TDs involved in finding a solution," said the Minister.
In the meantime SDLP East Derry MLA John Dallat has welcomed the agreement reached between the operators of the Foyle ferry service, Limavady Borough Council and Donegal County Council over the funding of the Magilligan-Greencastle ferry. He said: "This agreement is welcome both in Donegal and the Causeway coast.
"Nevertheless, it does not remove the need for both governments to eventually assume responsibility for operating the service. That is the only way forward if this service is to be secure in the longer term.
"This week in the Assembly I again challenged the Minister for Regional Development to change the offending legislation which prohibits Donegal in partitionist terms." The Raids Order 2003 seems to prohibit the funding of a ferry service to another jurisdiction
"I pointed out that there are more than 200 border crossings that present no problems," said Mr dallat, "and have yet to be told why the Foyle ferry service is treated differently from the Strangford service for instance.
"The Foyle ferry service should not be a burden on either the rate payers of Limavady or Donegal."