Canada's National Energy Board announced it approved the application for the construction and operation of the $16.1 billion gas pipeline.
"We looked at how the project would contribute to sustainability in the way it would affect the people, the land where they live and the economy, now and in the future," the NEB said in a statement. "We recognize that the Mackenzie Gas Project would have much larger and more far-reaching effects than previous developments in the North."
The energy board attached 264 conditions to engineering, safety and environmental issues for the project that must be met if developers go ahead with the pipeline.
The project includes a 750-mile leg, three onshore gas fields and is designed to carry 1.2 billion cubic feet of gas per day, which is enough to meet the energy demands of more than 60 percent of all Canadians, the NEB said.
Imperial Oil, Canada's largest petroleum company, leads a project consortium that includes some of the biggest energy companies in the world.
Consortium members, as well as some of their critics, are examining the long-term economic issues associated with the project. An abundance of shale gas in the United States could also sway decision-makers.
The NEB said that "if the proponents decide to build" the project, they would need more permits from other Canadian government agencies.