The Yukon Government has approved Yukon Energy's plans to build a LNG powered generating plant in Whitehorse — the final hurdle that will see aging diesel backup generators replaced with new generators powered by liquefied natural gas.

The approval clears the way for construction to begin on the $40 million project along the south access road into Whitehorse.

The deputy minister of the Executive Council office, Joe MacGillivray, signed off the decision document earlier this week on behalf of the Yukon Government.

The document approves all the terms and conditions set out last month by the Yukon Environmental and Socio-economic Assessment Board.

The government says a variety of permits and certificates are all that's required to allow contruction to begin.

Energy Minister Scott Kent says he expects there is sufficient time in the building season to have the new LNG plant operational this winter. 

Yukon Energy says the new LNG generators will be more efficient to run and will save ratepayers millions of dollars in fuel costs.