diff --git a/contractcourt/chain_arbitrator.go b/contractcourt/chain_arbitrator.go
index 0d8b6b5d..fb5f1c97 100644
--- a/contractcourt/chain_arbitrator.go
+++ b/contractcourt/chain_arbitrator.go
@@ -342,23 +342,6 @@ func (c *ChainArbitrator) Start() error {
 				pCache:    c.cfg.PreimageDB,
 				signer:    c.cfg.Signer,
 				isOurAddr: c.cfg.IsOurAddress,
-				notifyChanClosed: func() error {
-					c.Lock()
-					delete(c.activeChannels, chanPoint)
-
-					chainWatcher, ok := c.activeWatchers[chanPoint]
-					if ok {
-						// Since the chainWatcher is
-						// calling notifyChanClosed, we
-						// must stop it in a goroutine
-						// to not deadlock.
-						go chainWatcher.Stop()
-					}
-					delete(c.activeWatchers, chanPoint)
-					c.Unlock()
-
-					return nil
-				},
 				contractBreach: func(retInfo *lnwallet.BreachRetribution) error {
 					return c.cfg.ContractBreach(chanPoint, retInfo)
 				},
@@ -697,22 +680,6 @@ func (c *ChainArbitrator) WatchNewChannel(newChan *channeldb.OpenChannel) error
 			pCache:    c.cfg.PreimageDB,
 			signer:    c.cfg.Signer,
 			isOurAddr: c.cfg.IsOurAddress,
-			notifyChanClosed: func() error {
-				c.Lock()
-				delete(c.activeChannels, chanPoint)
-
-				chainWatcher, ok := c.activeWatchers[chanPoint]
-				if ok {
-					// Since the chainWatcher is calling
-					// notifyChanClosed, we must stop it in
-					// a goroutine to not deadlock.
-					go chainWatcher.Stop()
-				}
-				delete(c.activeWatchers, chanPoint)
-				c.Unlock()
-
-				return nil
-			},
 			contractBreach: func(retInfo *lnwallet.BreachRetribution) error {
 				return c.cfg.ContractBreach(chanPoint, retInfo)
 			},
diff --git a/contractcourt/chain_watcher.go b/contractcourt/chain_watcher.go
index 8333b52f..1ab959cb 100644
--- a/contractcourt/chain_watcher.go
+++ b/contractcourt/chain_watcher.go
@@ -78,13 +78,6 @@ type chainWatcherConfig struct {
 	// machine.
 	signer lnwallet.Signer
 
-	// notifyChanClosed is a method that will be called by the watcher when
-	// it has detected a close on-chain and performed all necessary
-	// actions, like marking the channel closed in the database and
-	// notified all its subcribers. It lets the chain arbitrator know that
-	// the chain watcher chan be stopped.
-	notifyChanClosed func() error
-
 	// contractBreach is a method that will be called by the watcher if it
 	// detects that a contract breach transaction has been confirmed. Only
 	// when this method returns with a non-nil error it will be safe to mark
@@ -492,16 +485,7 @@ func (c *chainWatcher) dispatchCooperativeClose(commitSpend *chainntnfs.SpendDet
 	}
 	c.Unlock()
 
-	// Now notify the ChainArbitrator that the watcher's job is done, such
-	// that it can shut it down and clean up.
-	if err := c.cfg.notifyChanClosed(); err != nil {
-		log.Errorf("unable to notify channel closed for "+
-			"ChannelPoint(%v): %v",
-			c.cfg.chanState.FundingOutpoint, err)
-	}
-
 	return nil
-
 }
 
 // dispatchLocalForceClose processes a unilateral close by us being confirmed.
diff --git a/contractcourt/channel_arbitrator.go b/contractcourt/channel_arbitrator.go
index b80995b9..3d96d51b 100644
--- a/contractcourt/channel_arbitrator.go
+++ b/contractcourt/channel_arbitrator.go
@@ -1364,10 +1364,16 @@ func (c *ChannelArbitrator) channelAttendant(bestHeight int32) {
 			)
 
 		// We've cooperatively closed the channel, so we're no longer
-		// needed.
+		// needed. We'll mark the channel as resolved and exit.
 		case <-c.cfg.ChainEvents.CooperativeClosure:
 			log.Infof("ChannelArbitrator(%v) closing due to co-op "+
 				"closure", c.cfg.ChanPoint)
+
+			if err := c.cfg.MarkChannelResolved(); err != nil {
+				log.Errorf("Unable to mark contract "+
+					"resolved: %v", err)
+			}
+
 			return
 
 		// We have broadcasted our commitment, and it is now confirmed