Donald Trump has said "it's a great day for American jobs" after his administration issued a permit to build the long-delayed Keystone XL oil pipeline.
The decision to grant a permit to pipeline builder TransCanada marks a reversal from the Obama administration and clears the way for the 8 billion dollar (£6.4 billion) project to be completed.
Keystone will carry tar sands oil from Canada to refineries on the Texas Gulf Coast.
The president said the decision ushers in a "new era" of American energy policy and will reduce dependence on foreign oil.
The decision caps a long fight between environmental groups and energy industry advocates, and is one of several steps the administration is expected to take in coming weeks to prioritise economic development over environmental concerns.
The State Department said that building Keystone serves the US national interest, the opposite conclusion to the one reached during the Obama administration.
The department, responsible for reviewing the project because it crosses an international border, reached its conclusion over the pipeline serving US national interests following a review of environmental, economic and diplomatic factors.
The permit was signed by Tom Shannon, a career diplomat serving as undersecretary of state for political affairs. Secretary of state Rex Tillerson had recused himself due to his previous work running Exxon Mobil.
It wasn't immediately clear what had changed since the State Department reached the opposite conclusion two years ago.
TransCanada, the Calgary-based company that first applied for a presidential permit in 2008, called the decision a "significant milestone".
"We greatly appreciate President Trump's administration for reviewing and approving this important initiative," said TransCanada chief executive Russ Girling.
"We look forward to working with them as we continue to invest in and strengthen North America's energy infrastructure."
The 1,700-mile pipeline will carry oil from tar sands in Alberta, Canada, to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma.
It would move about 800,000 barrels of oil per day, more than a fifth of the oil Canada exports to the US.
Even with a presidential permit, the pipeline faces obstacles, most notably the route, which is still being heavily litigated in the affected states. Native American tribes and landowners have joined environmental groups in opposing the pipeline.
TransCanada said it would continue engaging with "neighbours throughout Nebraska, Montana and South Dakota to obtain the necessary permits and approvals to advance this project to construction".
Oil industry advocates say the pipeline will improve US energy security and create jobs, although how many is widely disputed.
TransCanada has promised as many as 13,000 construction jobs, 6,500 a year over two years, but the State Department previously estimated a far smaller number.
The pipeline's opponents contend the jobs will be minimal and short-lived and say the pipeline will not help the US with energy needs because the oil is destined for export.
Mr Trump has championed the pipeline and backed the idea that it will create jobs.