Fife Council Building Services worked to transform the grade B-listed house after it had fallen into serious disrepair with dry rot throughout.
The restored building now features four residential apartments complete with a reconstructed slate roof and staircase.
An architect also used photographic records dating back to the early 1900s in order to restore stonework, timber and plaster mouldings.
Cllr Judy Hamilton, executive spokesperson for housing and building services at Fife Council, said: “The restoration of the townhouse is an excellent example of the high-quality work being carried out by Fife Council Building Services.
“It’s wonderful to see the building proudly restored to its former glory and because it’s a landmark building in the town centre, its reinstatement helps to generate pride in the community and confidence in the local economy."
In addition to the townhouse, the site features over 20 new-build homes.
The work comes as part of Lochgelly Town Centre’s regeneration programme, which will contribute towards Fife Council’s wider commitment to deliver 2,700 new affordable homes by May 2017.
Cllr Hamilton added: “…They will all contribute to providing warmer, drier, healthier homes that will help to reduce fuel poverty and improve living standards for residents.”