High River Mayor Craig Snodgrass said council has agreed with engineers to let the neighbourhood of Wallaceville return to its natural state.
"The 2013 flood disaster and the uncertainty that has followed for many of the town's citizens have been extremely difficult," Snodgrass said in a news release.
"The decision to return Wallaceville to an undeveloped state was not taken lightly, however, we do believe it is the responsible direction to take, and we know that the property owners need a decision so they can move forward."
Snodgrass suggested the move will also protect the rest of the community.
Wallaceville was one of the hardest hit areas of the 2013 flood because it sits at a critical choke point along the Highwood River.
Due to its ground water levels and the path the river winds through the neighbourhood, it is susceptible to repeated flooding.
Returning Wallaceville to an undeveloped state will widen the river channel and eliminate the choke point.
"I realize this was a tough decision for the town to make, but it's really the only option if we want to help protect High River in future floods," said Rick Fraser, associate minister of Recovery and Reconstruction for High River.
Reiley McKerracker, manager of engineering for High River, said protecting Wallaceville would have required the construction of a 3.2 metre-high dike.
He said the feasibility of doing that was questionable.
The properties to be included in the Wallaceville naturalization are those contained between Lineham Canal and the main channel of the Highwood River along and east of Centre Street.
Valuation of the properties in the neighbourhood will be based on 2013 municipal tax assessments. Details on the property purchase program are being finalized and will be available in January.
Municipal Affairs Minister Ken Hughes said the province will be providing financial support for the measure.
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