Paul Jackman,(46), who lives in the town, owns a narrowboat near Lincoln and said magnet fishing was a popular pastime for many people on boats.
He decided to visit the canal with his two sons, Lewis (11) and Archie (8).
He told the Leader: “I’ve got a narrowboat which is based close to Lincoln and decided to give magnet fishing a go with my two boys.
“So far in the Lincoln area, we’ve only found a few bits of old metal in the water, but my sons really enjoyed it.
“They are really into treasure hunting - and to them it (magnet fishing) is like a treasure hunt.”
Mr Jackman was unsure what they would ‘catch’ in Louth Canal.
He says they were shocked to pull an old gun out of the water.
Mr Jackman added: “It was certainly a bit of shock to find a gun at the bottom of the canal.
“It’s certainly something you don’t expect to find.”
Mr Jackman says his two sons were ‘screaming with excitement’ at first and described the find as ‘interesting.’
He contacted police and said the force’s firearms squad visited his home and took the gun away.
Mr Jackman decided to go back to the same spot on the canal a couple of weeks later...because he thought there might have been some discarded bullets in the water. But, in another shock discovery, Mr Jackman ‘landed’ another firearm - an air rifle.
He said: “I never believed we would find another gun but it goes to show, you never know what you will find in the water.”
Mr Jackman says he and his sons are keen to continue magnet fishing to see what else they can uncover.
A spokesman for Lincolnshire Police said the gun is an ‘old firearm that is believed to have been in the water for a long time’.
The spokesman added: “This is not a common incident, and we don’t anticipate any other finds like this in the canal, and there is no believed danger to the public.”