The Canadian Environmental Assessment Agency has approved plans to build an electric transmission link between Labrador and the island of Newfoundland.
The provincial government says the approval represents a significant milestone for the $7.7-billion project.
Provincial Natural Resources Minister Derrick Dalley says the assessment release follows the province's own environmental assessment process, which wrapped up in June.
The Muskrat Falls portion of the project, under construction along the Lower Churchill River in central Labrador, received environmental approval from both levels of government in March 2012.
An 1,100-kilometre transmission link would deliver electricity produced at the Muskrat Falls generating station to the island of Newfoundland.