On December 25, 1782, Peter McNab purchased the island from the Cornwallis family. Maugher Beach, still owned by Joshua Mauger, was acquired shortly afterward. McNab had prospered since first arriving in Halifax and was now a man of some wealth. In addition to paying the Cornwallis family l,000 sterling for the island, he was forced to pay Bulkely 313 for "improvements" the latter had made during the term of his lease. This was nothing more than polite robbery as Bulkely's improvements had consisted of little more than harvesting the best timber for his own profit. Interestingly, the latter amount represents exactly what Bulkely had paid for his lease sixteen years earlier.

Peter McNab made no secret of his feelings toward Bulkely. In a letter to Cornwallis, he writes:

... I can't but think sir that you'll agree with me, in concurring that Mr. Bulkely's conduct to have been very unjust in exacting from me the full sum he gave for the purchase of the lease 16 years ago, tho' he has during that time fulfilled not one condition of the lease ... but has done the island a great deal of damage, by the wood sold from off it.

The Cornwallis family, perhaps embarrassed about the matter, gave Peter permission to collect "whatever money is now due to us from rents in the island." McNab owned the whole island and was known locally as "Governor" McNab.

Little is known of McNab's background or when he arrived in Halifax. He has been variously described as a shoemaker, Royal Navy Lieutenant on the staff of Governor Cornwallis and a veteran of the British Army, having served in America during the Revolutionary War. He is purported to have settled in Halifax in 1754, 1758 or after the peace of 1763.

Interestingly, the later date is supported by an advertisement which appeared in the July 5, 1796, edition of the Royal Gazette. In the advertisement, Peter McNab advises the public that he is closing his business, and offers

... his most sincere thanks to the gentlemen of the navy and army, and the community at large, for the very flattering encouragement he has received from them during the thirty-three years he has followed his business in this [Halifax] place.

In time, Cornwallis Island became known as McNabs Island. The change of name appears to have been gradual, though, for of two maps of the island produced by the Royal Engineers about 1808, one lists the island as "McNabs Island" while the other still refers to it as "Cornwallis Island."

On the island Peter McNab built a stone cottage near the base of a hill at the head of McNabs Cove from where it commanded a fine view of Halifax Harbour and the cove. Margaret Cook, Peter's great-great-granddaughter, later described the cottage as:

a long low stone house ..., [with] a big pantry ..., the windows would be set deep ..., [with] high shallow mantel pieces ..., over the fireplace ..., the doors and banisters were of mahogany ... with the pretty moldings in the ceiling.

Peter McNab used this cottage as his country house, spending the winters in Halifax. Interestingly, though, Peter McNab's home opposite Grade Parade was advertised for sale in 1783, the year following his purchase of McNabs Island.

In 1781, Peter was listed as serving on a Grand Jury.

On several occasions in 1787, McNabs Island was visited by William Dyott, a sometime General in the British Army and Aide-de-camp to his Majesty King George III. On October 1 of that year Dyott journeyed to the island and later recorded:

It [McNabs Island] has been purchased within these few years by a Scotsman who is making use of his utmost endeavour to clear it. There are not more than twenty or thirty acres free from wood. What has been improved turns out very well.

Peter McNab died on November 3, 1799, and was buried in St. Paul's cemetery, Halifax. His wife, Susannah (Koun or Kuhn) died on May 7, 1822, and was buried with her husband.