The Canadian government announced Tuesday it would buy the troubled Trans Mountain pipeline for CAN$4.5 billion ($3.46 billion).
Kinder Morgan, the company that was constructing the pipeline to carry bitumen from the Alberta oil sands to the west coast and from there to Asian markets across the Pacific Ocean, had halted work over opposition to the project.
The company will now go ahead with construction when the sale to the government is finalized, probably in August.
The pipeline may lead to a constitutional crisis in Canada.
Prime Minister Justin Trudeau said the pipeline is vital to the future economic well-being of Canada and it must and will be built. The federal government does have authority over interprovincial projects.
But the province of British Columbia (B.C.) has gone to court to see if it can stop the pipeline from crossing its territory.
Meanwhile, the Alberta provincial government said if British Columbia does block the project, it will lessen or turn off the taps completely on oil and gas exports to B.C., sending the cost of gasoline skyrocketing.
By Barry Ellsworth in Trenton, Canada