Thomas Swan apparently hurled his British War Medal out of a train window soon after being presented with it in 1921 as he wanted to forget the horror of the trenches.
Mr Swan, a father-of-four, worked as a milkman in north London after the war and rarely talked about his experiences in northern France before he died aged 55 in 1935
He is thought to have been sickened by his military service as he had been deemed unfit to fight and ordered to bury thousands of dead servicemen.
The medal lay undisturbed until it was found in November 1999 by Bob Sheppard, who was out with his metal detector in a field close to the railway line in Betchworth, Surrey.
He cleaned it up and saw that it was inscribed as having belonged to Private Thomas Swan who served in the Queen's Regiment.
Mr Sheppard, 62, of Crawley, West Sussex, then spent a fruitless 11 years trying to find any family of Mr Swan so he could give them the medal.
His breakthrough came last month when Mr Swan's great granddaughter Keely McGuinness, 35, uploaded her family tree on a genealogy website.
Her details were found by World War One researcher Andrew Bailey who was helping Mr Sheppard in his search and got in touch with her.
The pair then arranged to give her the medal and took her to the field where it was found, along with her father who is also called Thomas Swan
They also revealed how Mr Swan had been given military labour work which involved burying the dead after enlisting in March 1917 at the age of 38.
Retired brewery worker Mr Swan, 70, of Chingford, Essex, said he was "shocked and delighted" that the medal had been returned to his family.
He said: "My grandfather died before I was born so I never knew him. I didn't even realise that he had been given any medals.
"I can't remember my late father ever talking about what my grandfather got up to in World War One.
"It is quite likely that he was so sickened by what he saw during the war that he didn't like to talk about it and wanted to forget it.
"The medal was found about 50 yards or so from the railway line and it is a mystery how it got there. But we think that he could have just hurled it out of the window of the train in disgust after being presented with it.
"The action of the farmer ploughing for the next 80 years or so could easily have moved the medal further into the field
"It is fantastic to see it after all these years and we are really grateful."
Mrs McGuinness of King's Lynn, Norfolk, said: "Mr Sheppard was very excited to have found me. He told me he had been looking for the rightful owners of the medal ever since he found it.
"I was quite surprised that he tried so hard to find us and return the medal to our family and it's just incredible that he managed to find me after searching for so long.
"We were all really excited because for them it was great to return the medal to our family and for us it has been fascinating to learn about my great grandfather."
Mrs McGuinness, a photography lecturer, said she also believed that her great grandfather had deliberately thrown the medal away.
She said: "He was a class C soldier so during the war one of his jobs was to bury the dead. I think he was annoyed at the situation and his involvement in the war and in a fit of annoyance threw it away.
Mr Sheppard, a retired vacuum salesman, who has been metal detecting as a hobby for 20 years, said: "The medal was just three inches below the surface of the field when I found it.
"It was muddy, but I took it home and washed it up and polished it up to make it shine again. You could read Mr Swan's name, number and rank in the Queen's Regiment as it was inscribed around the perimeter."
Mr Sheppard, a retired vacuum salesman, contacted the Ministry of Defence to try and find details about Mr Swan, but was told that records had been destroyed in the Blitz.
He recently enlisted the help of Mr Bailey after reading a Treasure Hunter magazine article about how he had helped trace relatives of another soldier.
Mr Bailey found out that Mr Swan was born in Islington in 1979 and had been employed by the Great Northern Railway in 1915.
"Apparently it was quite common for soldiers to throw their medals away at the time because they were so sickened by what they saw," he said.
"I felt quite emotional giving the medal to the family as I had become rather attached to it, but I am over the moon that it's now back with them."
