Brazil's environment agency gave its definitive approval on Wednesday for construction of the Belo Monte hydroelectric dam, a controversial $17bn (£10bn) project in the Amazon that has drawn criticism from native Indians and conservationists.
The regulator, Ibama, issued licences to the consortium in charge of Belo Monte to build the massive dam on the Xingu River, a tributary of the Amazon.
The government has said the 11,200-megawatt project, due to start producing electricity in 2015, is crucial to provide power to Brazil's fast-growing economy. It will be the world's third biggest hydroelectric dam after China's Three Gorges and Itaipu on the border of Brazil and Paraguay.
In January, Ibama had issued a preliminary licence allowing the construction site to be set up.
Since then the project has been halted and resumed several times owing to court injunctions obtained by environmentalists and native Indians opposing the dam.
Norte Energia, the consortium that won the auction to build and operate Belo Monte, is made up of state-run utility holding company Eletrobras ELET6.SA, Brazil's second-largest pension fund Petros and local construction companies.
Originally conceived 30 years ago, progress on Belo Monte has been slowed over the years by protests, including an incident in 2009 in which Kayapo Indians armed with clubs and machetes attacked a state electricity official.
Critics from singer Sting to Hollywood director James Cameron and environmental group Greenpeace have said the dam will damage the environment and harm thousands of people living in the region.
The 3.75-mile dam will displace 30,000 river dwellers, partially dry up a 62-mile stretch of the Xingu river, and flood large areas of forest and grass land.
