Three observations of the 5.54 s Transient Anomalous X-ray Pulsar XTE J1810-197 obtained over 6 months with the Newton X-Ray Multi-Mirror Mission (XMM-Newton) are used to study its spectrum and pulsed light curve as the source fades from outburst. The decay is consistent with an exponential of time constant 300 days, but not a power law as predicted in some models of sudden deep crustal heating events. All spectra are well fitted by a blackbody plus a steep power law, a problematic model that is commonly fitted to anomalous X-ray pulsars (AXPs). A two-temperature blackbody fit is also acceptable, and better motivated physically in view of the faint optical/IR fluxes, the X-ray pulse shapes that weakly depend on energy in XTE J1810-197, and the inferred emitting areas that are less than or equal to the surface area of a neutron star. The fitted temperatures remained the same while the flux declined by 46%, which can be interpreted as a decrease in area of the emitting regions. The pulsar continues to spin down, albeit at a reduced rate of (5.1+/-1.6)x10^{-12} s s^{-1}. The inferred characteristic age Tau_c = P/2Pdot ~17,000 yr, magnetic field strength B_s ~1.7x10^{14} G, and outburst properties are consistent with both the outburst and quiescent X-ray luminosities being powered by magnetic field decay, i.e., XTE J1810-197 is a magnetar. ; Comment: 10 pages, 5 figures, accepted by Ap.J