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.
Meanwhile, British Columbia First Nations who have fought the project said they were considering continued legal action, and the provincial premier, John Horgan, tweeted the project “poses a great risk to our coast, our environment and our economy”.
The C$7.4 bn pipeline expansion project has divided opponents, who are concerned about oil spills and climate change, and supporters, who see it as a boost for Canada’s struggling energy sector – one that will help fuel the economy for years to come.
Canada ranks as the world’s fifth largest producer of oil and natural gas.
The project twins the existing 1,150 km (715 mile) Trans Mountain pipeline and would triple its capacity from 300,000 barrels per day to 890,000 per day.
It would carry crude oil from Edmonton, Alberta to Burnaby, British Columbia (BC) and increase oil tanker traffic on the Pacific coast from five to up to 34 tankers a month.
Mr. Trudeau says the pipeline expansion would ease Canada’s reliance on the US market and help get a better price for its resource.
Business groups, oil industry workers and the Alberta government all back the project. At least two indigenous groups are actively seeking an ownership stake in the project.
The Liberal government bought the pipeline to help ensure the project’s survival after energy infrastructure giant Kinder Morgan walked away over concerns about delays.
