Panama Canal Zone, former territory within Panama, 553 sq mi (1,432 sq km), that was administered by the United States under a 1903 treaty (with later amendments) with Panama. The zone included the Panama Canal and an area extending 5 mi (8.1 km) on each side. Under the terms of a later treaty (1977), the zone was abolished in Oct., 1979, and returned to Panamanian rule; the canal itself was ceded to Panama in 1999. Panama has begun turning former military installations into housing, civilian ports, hotels, industrial parks, universities, and sports facilities. Some bases have been converted into tourist complexes aimed at attracting cruise-ship passengers, while some undeveloped areas have become eco-tourist sites. The northern section of the former territory is now part of Colón prov., and the southern section part of Panamá prov. Cristóbal, Balboa (Caribbean and Pacific ports, respectively), and Ancon are the chief towns.