Supporters of the roughly $39 billion project expect it to be up and running by 2030 if it receives all necessary permits. The LNG would be exported mainly to Asian countries.
Alaska LNG includes a liquefaction plant on the Kenai Peninsula in southern Alaska and a proposed 807-mile (1,300 km) pipeline to transport gas from northern Alaska through the state.
Environmental groups opposed the project, for which exports were first approved by the Donald Trump administration. The Biden administration conducted an environmental review of Alaska LNG, concluding that it had economic and international security benefits, and that opponents failed to prove that exports were not in the "public interest."
The Biden administration modified a previous permit to prohibit the greenhouse gas emissions associated with the project. Nevertheless, environmental groups have denounced the decision as a "carbon bomb."
"Joe Biden's climate presidency is flying off the rails," said Lukas Ross, who works with environmental group Friends of the Earth. Ross said this is the second US approval of a "fossil fuel megaproject" in months.
Last month, the Biden administration approved ConocoPhillips' $7 billion Willow oil and gas drilling project on Alaska's North Slope, a move that angered environmentalists who were hoping Biden would be stronger on the climate issue.
Earthjustice, an environmental law firm, said the decision has cleared the way for additional lawsuits aimed at stopping the project.