On a visit to Brussels on Wednesday, he also said each of the EU institutions, including Parliament, will have a key say in any final agreement between the EU and Britain.
Farron said, "Whatever the view of UK ministers, it's clear the European Parliament will have to sign off any deal on exit."
He was speaking after a meeting with European Parliament lead Brexit negotiator Guy Verhofstadt, a fellow Liberal politician.
After the short meeting with the ALDE group leader, Farron said, "It is clear there is immense goodwill towards Britain but the government must accept some tough truths about the Brexit negotiations."
On his meeting with Verhoftstadt, he added, "We discussed whether article 50 can be revoked, and my conclusion is that if there is the political will, it would be possible to do so.
"At the end of this process the UK needs to be at peace with itself and its neighbours. With all due respect to Guy Verhofstadt and Theresa May, the British people deserve more than a deal imposed on them by Westminster or Brussels.
"We need to make sure that people feel that the deal expresses what they voted for and where they want Britain to stand in the world.
"The people owned the decision to leave, and they have every right to own the decision on a destination. That is why I believe there must be a referendum on the terms of the deal.
"I look forward to maintaining close relationships with Guy and other Liberal colleagues across Europe in the important months ahead."
Meanwhile, the UK Parliament is entitled to know details ahead of the UK's negotiations with the EU, Labour said on Wednesday as MPs debated the government's Brexit strategy.
MPs are expected to vote in favour of the government's timetable, of starting formal talks by the end of March, while also calling on the Prime Minister to publish a "plan" beforehand.
The government has so far refused a "running commentary" on its strategy.
Shadow Brexit secretary Keir Starmer said it had now "caved in".
Opening the Commons debate on Wednesday, he said the government had refused "on every occasion" to give more details, saying information about its negotiating stance was important because it "sets the scene" for Brexit.