The Great Falls Tribune reports U.S. District Judge Brian Morris' order on Thursday came as Calgary-based TransCanada was preparing to build the first stages of the oil pipeline in northern Montana.
In August, Judge Morris ruled that the State Department must supplement a more thorough study of potential environmental effects of the pipeline.
"This is a significant setback for TransCanada's Keystone XL pipeline project and big win for Indigenous defenders, the environment, and for the thousands of people who have been fighting this pipeline for almost a decade".
TransCanada Corp's almost 1,200-mile pipeline has become one of the major battlegrounds in the climate change debate and, if completed, would carry an estimated 800,000 barrels per day from Canada's tar sands pits to Gulf Coast refineries in the US.
Morris said the government must provide "new and relevant information regarding the risk of spills".
The State Department initially denied the pipeline a permit in 2015, under the Obama administration.
The permit approval followed years of intense debate over the pipeline amid steadfast opposition from environmental groups.
The pipeline construction sparked months of protests by Native Americans and activist groups, who say the project could pollute local water supplies.
Energy producers in Canada already are struggling with a shortage of pipeline space that has hammered prices for their crude, sending its discount to US benchmarks to the widest on record in recent weeks. His decision was one of scores of court rebukes to the Trump administration for decisions on the environment, immigration and transgender service in the military, among other issues, made hastily and, in the opinions of dozens of judges, without the "reasoned consideration" required by various federal laws, particularly the Administrative Procedure Act.
The massive project remains one of the most controversial infrastructure proposals in modern American history.
Environmentalists called the ruling a "major setback" for the pipeline project.
An AP map shows the proposed Keystone XL pipeline extension route.
TransCanada, which had been planning the pipeline for much of this decade, had planned to begin construction next year.
"This decision further reinforces the need for Canada to export its oil and natural gas to new global markets - ensuring fair market value for our natural resources, helping to meet growing global demand and expanding our customer base beyond the USA", she said.
- The State Department, in issuing the permit, failed to "analyze the cumulative greenhouse gas emissions" of the Keystone project and the expanded Alberta Clipper pipeline.
Judge Morris is the latest jurist to block Mr. Trump's initiatives under administrative-law rule, claiming that his officials have cut corners in administrative processes to make political decisions. "That's why we keep winning in the court".