The Standing Rock Sioux Tribe hailed an "historic decision" and said it was "forever grateful" to President Obama.
Instead, the US Army Corps of Engineers will look at alternative routes, a statement by the campaigners said.
The Sioux have been protesting since April against the pipeline which is near a reservation.
"Today, the US Army Corps of Engineers announced that it will not be granting the easement to cross Lake Oahe for the proposed Dakota Access Pipeline," the tribe's statement read.
