Canada has approved the Trans Mountain expansion project after a federal court sent it back for review last summer.
The decision could pose a challenge for PM Justin Trudeau as he heads into an election season likely to be fought in part over climate issues.
His federal Liberals took the rare step last year of buying the pipeline for C$4.5bn ($3.4bn; £2.6bn) to help ensure the project’s survival.
Environmentalists and some First Nations fiercely oppose Trans Mountain.
Mr Trudeau on Tuesday announced the new approval and said that all revenues the federal government earns from the project will fund a “transition to a green economy”.
“It is in Canada’s national interest to protect our environment and invest in tomorrow while making sure people can feed their families today,” he said.
Reaction to the announcement was swift, with environmental campaigners vowing the project will not go ahead without a fight.