France's Prime Minister Edouard Philippe announced on Wednesday that the divisions unleashed by the proposed new airport at Notre-Dame-des-Landes near the city of Nantes made it impossible to proceed.
"The project cannot go ahead in a climate of bitter opposition between two sides of the population that are nearly equal in size," he said, adding: "The project is therefore abandoned."
The decision ends years of debate over a project first mooted in the 1960s -- but sets the stage for a possible standoff with environmental activists who have been occupying the airport site for the past decade.
But it sets the government up for a potential standoff with about 200 protesters who have turned the rural 1,600-hectare site at Notre-Dame-des-Landes into a huge political squat.
"We will put a stop to the no-go zone which has flourished in this area for nearly 10 years," Prime Minister Edouard Philippe said, giving the protesters a few weeks until spring to leave voluntarily.
Philippe said the government would instead pour resources into modernising the existing Nantes airport and extending its runway, as suggested by mediators between the two sides last month.
He added that it was impossible to go ahead with the original plans given the "climate of bitter opposition between two sides of the population that are nearly equal in size".
About 500 police were deployed around the site Wednesday to secure the area, according to a source close to the operation, with up to 2,000 eventually expected to take part in clearing the camp.
Activists moved onto the proposed site in 2008 and have since built up a community that they bill as a utopia of organic farming and political debate.
A first attempt to clear the site in 2012 ended in clashes, forcing the government into a retreat.
Reports in conservative media have depicted the activists as radicals prepared to use violence to defend their cause.
The "zadistes" as they are known, after the state's ZAD acronym for the site, had rejected those reports but some had vowed to resist expulsion even if the airport project was ditched.
First envisioned in the 1960s, plans for the airport were relaunched in 2000 and later became a symbol of foot-dragging under Macron's unpopular Socialist predecessor Francois Hollande.
A regional referendum in 2016 found that 55 percent of local residents were in favour of the project.
Nantes mayor Johanna Rolland swiftly denounced the decision to axe the plan as a "betrayal" and "a denial of democracy".
Supporters had argued the new airport would boost the local economy and reduce noise pollution for Nantes residents living near the existing airport.
Cancelling it would be giving into the eco-warriors illegally occupying the site, they added.
But environmentalists argued that the area had unique flora and fauna and that the new airport was unnecessary given relatively light traffic at the existing terminal 30 kilometres (19 miles) away.
The project's cost, estimated at 730 million euros ($890 million), would have been about twice the cost of expanding the existing airport.
Activists on the 1,600-hectare rural site say they have developed it into a utopia of organic farming and political debate.
Philippe gave them until the spring to leave voluntarily, after which they would be evicted.
"We will put a stop to the no-go zone which has flourished in this area for nearly 10 years," he said.