A fishing settlement situated along a wide bight on the southeast shore of the Strait of Belle Isle, Green Island Cove, also known as Green Island Harbour, takes its name from the small grassy island located 1.3 km offshore from the cove. This island, which provides shelter and a fair anchorage between the island and the mainland, was so named because it was agreeable in color to the name it bears. Captain James cook labeled both Green Island Brook to the north and Green Island Cove in 1764.

Green Island Cove was first settled by Englishmen who came to the coast in the 1870s by way of fishing rooms and mercantile premises at Forteau and Anchor Point. According to oral tradition the Coates Family, who had come from England, established special squatters' rights at Green Island Brook for the prosecution of the salmon fishery. Green Island Cove was originally established as a sealing and furring post, one of a string of such posts established along the Newfoundland shore of the Strait of Belle Isle by the Genge family based at Anchor Point.