Originally put up for sale in April 2015 for £1.8m, the hotel is now being offered by property agent Christie & Co for £995,000.
The Quinion family, who have owned and operated the three-red-AA star, 12-bedroom hotel near Brampton, Cumbria, since June 1975, are planning to retire.
Barry Quinion oversees the kitchen, while his wife Lynne and sister Helen run the front of house.
Located within three and a half acres of gardens with a stream and ornamental lake, the Victorian hotel has been a member of sales and marketing consortium Relais & ChÁ¢teaux for 34 years and appeared consistently in the Good Food Guide for 41 years.
The main property includes a 40-cover restaurant and two lounges, while two substantial stone buildings in the grounds have lapsed planning permission for the development of additional accommodation.
There are also two additional buildings - Laundry Cottage (a two-bedroom bungalow which can be used as owner's accommodation or a holiday let) and Stable House comprising three self-contained cottages - which can be purchased by separate negotiation.
Mark Worley, director at Christie & Co's Newcastle office, said that Farlam Hall had been "lovingly owned and operated" by the Quinion family for many years. He added: "Their care and attention to detail shines through with the accolades the hotel has earned and the high quality of the property.
"With abundant possibilities for further investment and development, plus additional revenue streams, the business provides a lucrative opportunity for the right buyer."
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