The Michigan Public Service Commission said it approved an application filed by Enbridge to replace, construct and operate the new line to address what it said was the "long-term integrity of the Line 6B pipeline."
Enbridge has worked to replace hundreds of miles of Line 6B under a $268 million plan that would upgrade the pipeline's safety features and increase its volume to 500,000 barrels of oil per day.
A section of the pipeline ruptured in 2010, dumping so-called tar sands oil into the Kalamazoo River and a tributary. The nature of that type of crude oil causes it to sink in water and the incident was the costliest onshore oil release in history.
The MPSC said once the latest upgrade is completed, the entire length of Line 6B will have been replaced.
"The pipeline will serve a public need, is designed and routed in a reasonable manner, and meets or exceeds current safety and engineering standards," the state regulator said.