The federal government is giving the green light to a massive transmission line project that will see Manitoba hydroelectricity sent south of the border, following months of discussions between Ottawa and the Manitoba government.

Amarjeet Sohi, Canada's minister of natural resources, said Friday that the $453-million Manitoba-Minnesota Transmission Project has been approved.

"Canadians understand that a clean, modern and resilient electricity network helps fight climate change and transition to a lower carbon economy," Sohi said in a news release.

"The Manitoba-Minnesota Transmission Project achieves these goals while enhancing the competitiveness of our electricity market and creating good, middle-class jobs."

The transmission line will link generating stations in northern Manitoba through the Bipole III transmission line and across the U.S. border. It is expected to increase Manitoba's electricity export capacity to 3,185 megawatts, up from 2,300 megawatts.

Manitoba Metis Federation president David Chartrand speaks with media Friday. (Warren Kay/CBC)

The move comes after the National Energy Board recommended approving the proposal. The NEB put 28 conditions on the project; the federal government says five of them must be amended to accommodate concerns raised by Indigenous groups.

Hydro must ensure at least 20 per cent of construction contracts involve purchases from Indigenous suppliers, contracts with Indigenous subcontractors and the employment and training of Indigenous workers, the federal government said.

Tensions continue

The project has been a point of tension between the federal and provincial governments, in part because of potential impacts on Indigenous communities in the region.

News of the approval Thursday prompted several First Nations to issue a statement saying they will fight the decision, which they contend affects their rights to traditional treaty lands.

"We now have no choice but to oppose the project in the courts, both federal and provincial," Long Plain First Nation Chief Dennis Meeches said in a statement.

"This is especially puzzling when we did have a positive meeting with Manitoba earlier this week. We've already had our legal counsel advise us on our options and we will begin the court process soon."

But Manitoba Metis Federation president David Chartrand applauded the announcement and said it's now on Premier Brian Pallister to resolve ongoing feuds with the MMF.

"Ottawa listened and Ottawa I think did it right," Chartrand said.

"It's important to recognize the value and time and energy that was placed by Canada," he said. "There's no way the premier has the right now, especially after this, to blame Canada."

'Persuasion money'

Manitoba approved an environmental licence for the project in April. It called on the Trudeau government to approve the project or risk construction delays it said would cost taxpayers in the province $200 million a year in penalties, damages and other costs.

The federal government extended the deadline for approving the project, citing a need for more time to review deals made with the Manitoba Metis Federation that were quashed by the current Progressive Conservative government under Premier Brian Pallister.

Manitoba Hydro previously agreed to a $67.5-million deal with the MMF that was supposed to garner support for future hydroelectricity projects. Pallister cancelled the deal and characterized it as "persuasion money" at the time.

A few months later, the Pallister government scrapped a $20-million deal called Turning the Page that had been struck by the province, Hydro and the MMF. That agreement included terms that would see $20 million transferred to the MMF over 20 years in return for support for Hydro activities, including the Bipole III transmission line and the Keeyask generation project.

Judicial review this fall

The MMF sought an injunction to block the province from turfing the deal but a court rejected the request last fall.

The MMF also filed for a judicial review last summer, hoping the courts would overturn the province's decision to quash the $67.5-million payment. Chartrand said a decision is expected in September, and the outcome will determine whether Pallister had the authority to intervene and scrap the deal.

Depending on the decision, Chartrand said he will also consider filing a civil lawsuit against the province.

Chartrand said he is open to resolving the dispute outside of court, but it depends on how the province responds to the federal government's conditions for the Manitoba-Minnesota project.

"I will not back away on what I know is right and what we negotiated with Hydro," he said.

"I support this line, but you're not going to abuse Métis rights in this province."