The Canadian Coast Guard is recommending full removal of oil from the Manolis L shipwreck off Change Islands.

Anne Miller, regional director of the coast guard, said a report into the wreck done over the summer has concluded the removal of the oil is the best way forward.

The coast guard expects the work to cost more than $6 million, and "it would be ambitious" to expect a cleanup by summer 2017, Miller said.

The decision is welcomed by a citizens' committee in the Fogo Island-Change Islands area, a group that has been pushing to get the oil removed since 2014.

"We're really thrilled to have the government agency that would be doing the work agreeing and making steps to see that happens," said Carolyn Parsons, a member of the committee. "It's good to have them on board officially."

Premier Dwight Ball added that the recommendation was "good news."

"It's a beautiful area of our province, and the last thing that we would want to see is that being destroyed leaking of that oil," he told CBC Radio's The Broadcast.

While the assessment showed "significant damage" to the ship's hull, the coast guard says it is the same damage incurred during the sinking in 1985. According to their report, the ship is stable and showing no signs of breaking apart, with just a 10 per cent degradation of steel over 31 years.

Still, Miller said it's safe to assume there has been a gradual release of oil.

This admission backs up what the citizens of Fogo and Change Islands have been saying for years, Parsons said.

"What that confirms for us is the suspicion we've had all along," she told CBC. "That there's been chronic spills from her and probably bigger spills during storms."

In 2013, extreme weather dislodged the vessel, causing fuel to leak into Notre Dame Bay. A cofferdam was installed to catch the oil, a solution the coast guard said at the time was long term.

However, problems have persisted and oil has leaked into the bay on several occasions.

The Liberian-flagged freighter went down off the coast of Change Islands while carrying a load of paper from the Abitibi shipping port in Botwood.

According to the coast guard, between 113,000 and 150,000 litres of fuel remain on board the Manolis L.

With files from Jamie Fitzpatrick