President Barack Obama has rejected the Keystone XL pipeline, ending seven years of deliberations on a project that pitted the oil industry and Republicans against environmentalists and liberals.
Mr Obama said he agreed with the US State Department's view that the proposed 1,897km pipeline, which would have shipped 800,000 barrels of heavy-crude oil a day from Canada to the US Gulf Coast, "would not serve the national interests of the United States".
Speaking at the White House, the president said the pipeline "would not make a meaningful, long-term contribution to our economy".
Referring to the politics around the project, Mr Obama said that the pipeline had for years “occupied what I frankly consider an over-inflated role in our political discourse” and became a “campaign cudgel” used by supporters and opponents.
“The pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster as proclaimed by others,” he said.
Seeking to secure his presidential legacy as a champion of the fight against climate change, Mr Obama used the symbolic decision to reject the pipeline to promote his push towards renewable energy.
He referred to the country’s transition to “a clean-energy economy”, hailing the better-than-expected improvements in electric-powered cars and the developments in the switch to wind and sun-generated power.
"Shipping dirtier crude oil into our country would not increase America's energy security," said Mr Obama in his address, flanked by vice-president Joe Biden and secretary of state John Kerry.
The president's decision comes weeks before he travels to a United Nations conference in Paris at which he is hoping to agree a landmark accord with world leaders on measures to combat climate change.
Noting the world lead the Obama administration had in taking serious action against climate change, the president said that approving the pipeline would have “undercut” that global leadership.
Republican presidential candidates were quick to criticise his decision, indicating that the project is likely to become a major campaign issue again in the 2016 race for the White House.
Former Florida governor Jeb Bush said that Mr Obama's "politically motivated rejection" of the pipeline was a "self-inflicted attack on the US economy and jobs".
Another presidential contender Marco Rubio, the Republican senator from Florida, said on Twitter: "When I'm president, Keystone will be approved, and president Obama's backwards energy policies will come to an end."
The Republican-led congress had voted to start construction on the pipeline in February but Mr Obama vetoed the bill.
Former US vice-president Al Gore, a leading campaigner on climate change, described Mr Obama’s decision as an “inspiring step”.