Canada has approved the Trans Mountain Extension Project after it was returned by a federal court last summer for review.
The decision could be a challenge for Prime Minister Justin Trudeau as he embarks on an election season that is likely to be part of the climate change.
His federal liberals made a rare move last year to buy the C $ 4.5 billion pipeline ($ 3.4 billion, £ 2.6 billion) to ensure the survival of the project.
Environmentalists and some First Nations are fiercely opposed to Trans Mountain.
Mr. Trudeau announced the new approval on Tuesday, saying that any revenue that the federal government receives from the project will finance a "transition to a green economy".
"It is in Canada's national interest to protect our environment and invest in the future while ensuring that people can feed their families today," he said.
The response to the announcement was swift, and environmentalists swear that the project will not continue without a fight.
The $ 7.4 billion pipeline expansion project has divided opponents worried about oil spills and climate change and supporters who see it as an upswing for Canada's ailing energy sector ̵
Canada is the fifth largest oil and gas producer in the world.
What is the Trans Mountain project?
The project will connect the existing Trans Mountain pipeline with a length of 1,150 km and triple its capacity from 300,000 barrels per day to 890,000 barrels per day.
It would carry crude oil from Edmonton, Alberta to Burnaby, British Columbia (BC) and increase the oil tanker traffic on the Pacific Coast from five to as many as 34 tankers per month.
Trudeau said the pipeline's expansion would facilitate Canada's confidence in the US market and help get a better price for its resource.
Business groups, oil industry workers, and the Alberta government support the project. At least two indigenous groups actively seek to participate in the project.
The liberal government has bought the pipeline to ensure the survival of the project after the children's energy infrastructure giant Morgan clears up concerns about delays.
Election problems for Trudeau?
Jessica Murphy BBC News, Toronto
Prime Minister Justin Trudeau came to power promising that Canadians did not have to choose between the environment and the economy.
So far, he has found it difficult to please people on both sides of the problem – and Trans Mountain has played a major role in this tension.
Climate-conscious voters have begun to consider alternatives to the Liberals, especially in British Columbia, where the project has proven to be particularly difficult.
It is unlikely that Alberta – Canada's oil heartland, which is in a prolonged economic slump and historically favored by conservative parties – will win for itself.
The Liberals have also made it clear that they want to fight the upcoming elections on environmental issues – and their opponents will urge them to explain how they can support a pipeline project and fight climate change.
Mr. Trudeau was on the defensive on Tuesday, trying to convince the skeptics that this was not an either-or-decision.
What is the background for this approval?
Liberals first approved the Trans Mountain Extension Project in 2016.
This permit was lifted last August after being successfully challenged by a coalition of BC First Nations and environmental activists.
A federal court said supervisors failed to properly consult the First Nations communities and did not fully consider their impact on the endangered killer whales in the region.
Along with a review of the project's impact on coastal waters by the Canadian National Energy Regulatory Authority, a new First Nations Consultation Round has been launched.
The regulator recommended that the project be approved earlier this year.
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In addition, over 160 conditions and recommendations to mitigate environmental impact on the whales and the Salish Sea, a high-traffic inland waterway north of Vancouver, have been issued to Puget Sound in Washington.
The federal government said it will take up the recommendations and implement the accommodation measures it has taken with indigenous communities.
The construction of the project could start later this year.