Brazil's environment agency, Ibama, has given the go-ahead for initial work to begin on a huge hydroelectric dam on a tributary of the Amazon River.
Ibama approved the clearing of forest at the planned site for the Belo Monte hydroelectric plant.
Licences still have to be granted for the actual building of the plant.
Contracts for the dam, which would be the world's third biggest, were finally signed last August after years of protests.
On Wednesday, Ibama gave approval for 238 hectares (588 acres) of land to be cleared.
However, further legal challenges are likely, correspondents say.
Last month, the head of Ibama, Abelardo Bayma, resigned, citing personal reasons. Brazilian media reported that he had come under pressure to facilitate the granting of licences for the Belo Monte construction.
The government says the Belo Monte dam is crucial for development and will create jobs.
Environmental groups say the 6km-long (3.7 miles) dam will threaten the survival of indigenous groups and could make some 50,000 people homeless, as 500 sq km (190 sq miles) of land would be flooded.
Bidding for the project had to be halted three times before a final court appeal by the government allowed Norte Energia, led by the state-owned Companhia Hidro Eletrica do Sao Francisco, to be awarded the contract last year.
The proposal to build a hydro-electric dam on the Xingu River in the northern state of Para has long been a source of controversy.
The initial project was abandoned in the 1990s amid widespread protests both in Brazil and around the world.
The 11,000-megawatt dam would be the biggest in the world after the Three Gorges in China and Itaipu, which is jointly run by Brazil and Paraguay.
It is expected to cost between $11bn and $17bn, and provide electricity to 23 million homes.