The decision ends years of speculation as to whether the administration would approve the remaining $3.3-billion portion of the controversial pipeline project. Although construction and industry groups supported the project, contending it would create thousands of jobs, environmental groups opposed it.

The president said Secretary of State John Kerry had decided that the pipeline would not be in the national interest. “I agree with that decision,” Obama told reporters. Senior administration officials told reporters shortly after Obama’s announcement that Kerry based his decision on several conclusions outlined in the Record of Decision and National Interest Determination.

The chief conclusion was that, even though the project itself was not expected to increase significantly greenhouse-gas emissions, it had become a symbol of the U.S. stance toward addressing climate change worldwide.

“The U.S. is the world’s largest economy and the second-largest emitter of greenhouse gases. As such, strong policy domestically to combat climate change sets an important example for other countries and puts credibility behind the U.S. message,” one official said.

In a statement, Kerry said, “The United States cannot ask other nations to make tough choices to address climate change if we are unwilling to make them ourselves. Denying the Keystone XL pipeline is one of those tough choices, but it is the right decision for America and the world.”

The application process for the project has been excruciatingly drawn out. Parts of the pipeline already have been built, but the most controversial portion—a 1,179-mile stretch from Hardisty, Alberta, to Steel City, Neb.—has been held up for more than seven years, as both sides of the debate have fought bitterly.

Environmental advocates celebrated the decision, although they acknowledged that a future president more sympathetic to the project could reopen the issue.

Bill McKibben, co-founder of environmental organization 350.org, told reporters, “President Obama is the first world leader to cancel a fossil-fuel project because of its effect on the climate. That gives him new stature as an environmental leader.” He added that the grassroots advocates who fought the pipeline project will campaign against other large energy proposals. “Now, every fossil-fuel project here and around the world will be under siege,” he said.

But criticism of the State Dept. decision came just as swiftly. Sean McGarvey, North American Building Trade Unions president, says that, between 2009 and 2014, more than 12,000 miles of oil transmission pipelines have been built in the U.S.

McGarvey added, “We have built the equivalent of 10 Keystone XL pipelines since 2009, and the White House has not uttered one single word about those projects. In fact, President Obama attended the groundbreaking for the southern leg of the Keystone XL pipeline.”

McGarvey said that, despite the fact the State Dept. concluded in its Final Supplemental Environmental Impact Statement, released in early 2014, that the project would not have a significant impact on greenhouse-gas emissions, “President Obama has chosen to place politics over substantive policy, [which] only serves to advance the agenda of well-funded, radical environmentalists.”

TransCanada CEO Russ Girling, who noted his disappointment in the decision, said the company is carefully reviewing the case. “We believe [the Keystone pipeline] is in the best interests of the [U.S.] and Canada,” he said in a statement.