After months of protests by Native Americans and their supporters, the US Army Corps of Engineers -- which has approval authority -- had under the Obama administration nixed the plans to build the pipeline close to native grounds.
But President Donald Trump has supported the 1,172-mile (1,886-kilometer) oil pipeline, which would snake through four US states, and ordered officials to reconsider.
"The Department of the Army announced today that it has completed a presidential-directed review of the remaining easement request for the Dakota Access pipeline, and has notified Congress that it intends to grant an easement for a right-of-way across government land at Lake Oahe Dam and Reservoir, North Dakota," the Army said in a statement.
An easement is a special permit that allows an entity or person to cross someone else's land.
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The Army said the approval will "facilitate completion" of the last stretch of pipeline connecting the Bakken and Three Forks oil production areas in North Dakota to an existing crude oil terminal near Pakota, Illinois.
Pipeline supporters say it would allow for cheaper transport of North Dakota oil, allowing US producers to better compete with oil from Canada.
"This is a key step toward the completion of this important infrastructure project, which has faced months of politically-driven delays and will allow for safe transport of North Dakota product to market," North Dakota Governor Doug Burgum said in a statement.
North Dakota Senator John Hoeven also praised the decision, but said that the acrimonious process of building the pipeline raised questions about how such infrastructure projects are reviewed and approved.
"Going forward, we need to review the permitting process to ensure that everyone has an opportunity to be heard and that a fair, certain and legal process has been followed," Hoeven said.
Thousands of protesters had camped in freezing winter temperatures to block the pipeline's planned route, which the Standing Rock Sioux Tribe says creates a risk of water pollution and endangers areas with sacred historic sites and artifacts.
As the blistering North Dakota winter set in, the tribe encouraged protesters to decamp.
The standoff -- which included some 2,000 military veterans who joined the protest -- set off violent clashes with law enforcement as well as sympathetic demonstrations nationwide.
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