The US military has announced it will allow the $3.8bn Dakota Access oil pipeline to cross under a Missouri River reservoir in North Dakota, dealing a blow to Native Americans and climate activists who have been protesting against the project for months.

The army intends to cancel further environmental study and allow the Lake Oahe crossing as early as Wednesday, according to court documents filed by the Justice Department.

Construction could still be delayed because the Standing Rock Sioux Tribe, which has led opposition to the pipeline, said it would fight the latest development in court.

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The stretch under Lake Oahe is the final chunk of work on a 1,825km pipeline that would carry North Dakota oil through the Dakotas and Iowa to a shipping point in Illinois.

Developer Energy Transfer Partners (ETP) had hoped to have the pipeline operating by the end of 2016, but construction has been stalled while the Army Corps of Engineers and the Dallas-based company battled in court over the crossing.

Protests during former President Barack Obama's final months in power had forced the Army Corps to order a broader environmental study, that would have taken at least two more years to complete.

But on January 24, days after he took office, President Donald Trump signed an executive order telling the Corps to quickly reconsider the study and finish the project.

The Standing Rock Sioux, whose reservation is just downstream from the crossing, have long opposed the project fearing that a leak would pollute drinking water.

The tribe has led protests that drew hundreds and at times thousands of people who dubbed themselves "water protectors" to an encampment near the crossing.

In an interview with Al Jazeera, Amy Goodman, a TV host and investigative journalist covering the environment, linked the Army Corps' decision to the Trump administration's ties to ETP.

"When you look at Donald Trump's cabinet, the administration is extremely close to the pipeline company," she said, adding that the Energy Secretary Rick Perry served in the ETP board just weeks after leaving his post as Texas governor in 2015.

Sioux tribes 'undaunted'

Details of the tribe's legal challenge to the Army's decision were still being worked out, lawyer Jan Hasselman said.

But tribal Chairman Dave Archambault said the tribe is "undaunted" by the Army's decision.

Even if the pipeline is finished and begins operating, he said, the tribe will push to get it shut down.

An assessment conducted last year determined the crossing would not have a significant impact on the environment.

The Standing Rock Sioux Tribe also argued that under the Fort Laramie Treaties of 1851 and 1888, the federal government was obliged to consider a tribe's welfare when making decisions that affect the tribe.

"The Obama administration correctly found that the tribe's treaty rights needed to be respected, and that the easement should not be granted without further review and consideration of alternative crossing locations," Hasselman said.

"Trump's reversal of that decision continues a historic pattern of broken promises to Indian tribes and violation of treaty rights. They will be held accountable in court."

In a separate development on Tuesday, the Seattle City Council voted to cut ties with banking giant Wells Fargo over its role as a lender to the Dakota Access pipeline project.

Wells Fargo manages more than $3bn of Seattle's operating account, processing everything from payroll and vendor payments to revenues collected from city business taxes to city fines.

Tribal members had urged Seattle, a major city in the US West Coast, to send a broader message to oppose the pipeline and stand with indigenous people.