The Welsh government has agreed to pay Â£20,000-a-year for three years for a site to store the 15th Century vessel discovered in 2002.
It comes after Newport council said it planned to stop its funding due to budget cuts.
The new site will allow freeze-drying of the ship's remaining timbers to continue, completing its conservation.
Supporters of the Newport Ship raised concerns about its future in August when it emerged there was no plan in place for an alternative home after the lease on its current building expires in October.
Council officers have since looked at six options, including relocating it to a National Museum of Wales facility in Nantgarw, storing it in a shared warehouse in Pill or at vacant council-owned premises.
It also considered disposing of the timbers, but a report to councillors says that would leave the authority "accountable for the destruction of one of the most remarkable archaeological finds of the last 50 years".
Instead the report recommends renting a warehouse to store the ship, which would be part funded with a grant offered by the Welsh government.
This would allow freeze-drying of the ship's remaining untreated timbers to be completed and allow the public to visit it, as they do on open days held at its current home in Maeglas.
It is hoped the Friends of Newport Ship, a charity which supports the conservation project, will eventually take over its management.
The 500 year-old vessel was found on the banks of the River Usk during construction of the Riverfront theatre 12 years ago.
Dating back to 1460, it is the most complete surviving example of a ship of its time and experts think it was used for trading along the Atlantic seaboard.
It is thought it was built in south-west France, the Basque country or Portugal, but how it came to rest in Newport remains a mystery.
A new home could soon be found for Newport's medieval ship, safeguarding its future restoration.