After the Winter War, in the early Spring of 1940, the Soviet Union repeated its call for a naval base in the Hankoniemi area.
Finland's negotiation delegation was forced to agree to the Soviet Union's peace terms, including the Hankoniemi base. On March 12, 1940, the Moscow Peace Treaty included a lease to the Soviet Union, for 30 years, of 115 square kilometers of territory which included the area of Hankoniemi and the City of Hanko surrounding maritime areas, as well as about 400 islands.
The area was handed over to the Soviets at Midnight on 22 March 1940. The Finnish population had been evacuated from the area, causing about 8,000 Finns to lose their homes. Soviet Union forces built a strong military base. It oversaw maritime traffic in the Gulf of Finland, and was also a potential south-west invasion front for war against Finland. The base was occupied by infantry, airborne and armored forces. The Soviet Union fortified the border between Finland and the base, and the Finnish forces invested in troops and fortifications on their side.
Battles of the Continuation War that took place at the borders of the leased area were quite limited. The Finns did not try to assault the Hanko Soviet forces. However, the Soviet Union withdrew its troops from the leased area on December 2, 1941. The troops left their leased area heavily mined, which hampered the return of the civilian population in the Hanko peninsula.