Shell Canada could begin exploratory drilling for oil in the Shelburne Basin as early as this year.
Leona Aglukkaq, Canada's environment minister, has released her environmental assessment, saying the project does not pose a significant environmental threat.
The company has a four-year window to drill beginning in 2015.
The basin is about 200 kilometers from Nova Scotia's southwest coast.
In 2013 Shell pegged the project's total price tag at $970 million.
The federal government says it may require further authorization from the Canada-Nova Scotia Offshore Petroleum Board and from the Department of Fisheries and Oceans Canada.