US Interior Secretary Ken Salazar has said he will issue an order for a new moratorium on deep water oil drilling in the Gulf of Mexico after a court blocked an earlier ban.
A federal judge ruled on Tuesday that the six-month moratorium put in place in the wake of April's massive oil spill was too broad.
But suspending drilling "was and is the right decision", Mr Salazar said.
The White House had already said it would challenge the judge's ruling.
The judge said the lengthy ban was "invalid" and could not be justified, as the negative impact on local businesses was simply too great.
"I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities," Mr Salazar said in a statement.
The explosion on 20 April at the Transocean Deepwater Horizon rig killed 11 people and caused the worst US oil spill in US history.
The government's decision in the immediate aftermath to suspend deep water oil drilling in the region brought operations to a standstill at 33 offshore rigs, with companies considering relocating their giant drilling rigs the longer it went on.
The ban was challenged by the oil industry when Louisiana-based Hornbeck Offshore Services filed a lawsuit. It was joined by more than a dozen other companies.
After hearing arguments in the case, Federal Judge Martin Feldman said: "The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium."
Mr Feldman has been criticised in the US for his record of investing in oil companies.
But Mr Salazer said: "We see clear evidence every day, as oil spills from BP's well, of the need for a pause on deepwater drilling."
Earlier this month, the International Energy Agency (IEA) warned that the disaster would raise costs, delay new projects and bring a thorough review of offshore regulation.
"April's sinking of the Deepwater Horizon drilling rig and the ongoing oil spill might... prove to be a supply-side game changer," the IEA said in its monthly Oil Market Report.