The Federal government has reached an agreement with Kinder Morgan to buy the Trans Mountain pipeline and related infrastructure for $4.5 billion.

The deal was approved by cabinet on Tuesday morning and is now subject to approval by Kinder Morgan stockholders.

Federal Finance Minister Bill Morneau made the announcement from Ottawa and says the deal represents a ‘sound investment opportunity’.

“This $4.5 billion investment represents a fair price for Canadians and for shareholders of the company and will allow the project to proceed,” he said. “Our government’s position is clear, it must be built and it will be built.”

He says getting the pipeline built will preserve thousands of jobs and ensure Canada can get oil resources to world markets.

The federal government approved the pipeline expansion in November 2016.

Alberta Premier Rachel Notley and B.C. Premier John Horgan have been at odds over the expansion project since B.C. went to court to try and block it.

“Our world leading Oceans Protection Plan, the extensive and ongoing consultations with indigenous communities, the strength in environmental standards and the rigor of the approval process, all of these factored in to the decision our government’s announcing today,” said Morneau. “So too, did the understanding that division among provinces, such as the dispute that’s arisen between Alberta and British Columbia, cannot be allowed to fester in our country. Especially not when the resulting impasse threatens the livelihood of thousands of workers and Canada’s solid reputation as a good place to invest.”

Morneau says the pipeline dispute caused unnecessary delays and was holding back Canada’s economic growth.

“Our message today is simple, when we’re faced with an exceptional situation that puts jobs at risk that puts our international reputation on the line, our government’s prepared to take action.”

He says the government will not provide a subsidy to Kinder Morgan and instead will enter into a commercial agreement.

“It’s an agreement that we believe will deliver a real return on investment for the benefit of British Columbians, Albertans and all Canadians.”

Morneau says Kinder Morgan will proceed with its plan to twin the pipeline this summer while the sale is completed.

He says it is not the Government of Canada’s intent to be a long-term owner of the pipeline and it will work with investors to transfer the project and related assets to a new owner to ensure the project operates in the public’s interest.

"To investors considering Canada as a place to build big, important, transformative projects like the Trans Mountain expansion, we want you to know that you have a partner in Ottawa," Morneau said. "One who not only respects the rule of law, but who understands the challenges you are up against and will work with you to find solutions that work for everyone."

The purchase will be financed by Export Development Canada and includes; the pipeline, pumping stations, the marine terminal in Burnaby, B.C. and rights of way along the pipeline between Edmonton and Vancouver.

Premier Notley said in a statement that the announcement is a 'major step forward for all Albertans and Canadians'.

“When Kinder Morgan issued its deadline on April 8, the Government of Alberta committed that the deadline would be met. Today, we are delivering on that commitment. We are pleased to have worked with the federal government to ensure construction resumes, certainty is increased and Albertans and all Canadians enjoy the many benefits of having this project go forward. There is more work to do, but we will not stop until the job is done.”

Notley says Alberta will provide a backstop of up to $2 billion to cover costs in ‘unforeseen circumstances’ and in exchange, the province would receive equity in the completed project.

Kinder Morgan said in a release that it has agreed to work with the Government of Canada to find a third party buyer for the pipeline system and expansion project through July 22, 2018.

A new Crown corporation will manage the project.