Despite Halstead being named on Southport's retained list at the end of the 2017–18 season, he signed for Morecambe on 9 July 2018. Halstead, in an interview on the club's official website, said his move to Morecambe "was an opportunity to resurrect [his] career and one [he] couldn't turn down" and he was "delighted" to make the move back into the Football League. Morecambe manager Jim Bentley described Halstead as "experienced," "a decent all round goalkeeper" and "hungry to prove he can be number one." He signed a new two-year contract with the club in June 2019. He was released at the end of the 2020–21 season.
