Minnesota regulators have granted a permit for a massive flood diversion project near Fargo, marking a critical milestone in a decadelong effort to protect the region from devastating floods that could cost lives and billions of dollars.

In an announcement Thursday morning, the Minnesota Department of Natural Resources (DNR) said it has granted a conditional permit for the project, known as "Plan B," which is designed to divert floodwaters around the cities of Fargo and Moorhead, Minn. The $2.75 billion project would manage the high water levels on the unpredictable Red River, while not eliminating the flood risks altogether.

The flood-control project would be one of the largest public infrastructure projects in the region's history, and replaces a bitterly contested flood-control plan that was halted by a federal judge last year after Minnesota objected. The current plan provides for a more equitable distribution of the flooded land between North Dakota and Minnesota, state officials said Thursday.

"This provides great peace of mind against catastrophic flood damage in our community," said Del Rae Williams, mayor of Moorhead and chairwoman of the diversion board overseeing the project.

The Red River Valley boasts some of the most fertile land in the region, but is also a victim of its own geography. The land slopes just inches per mile, which means that a rapid spring thaw or an ice dam can be enough to send the Red River over its banks.

During floods, the flat region can resemble a massive, shallow lake. There have been 52 recorded floods of the Red River in the past 116 years, including 15 major floods, causing millions of dollars in damage to homes and businesses around Fargo and the region.

"The flatness of the topography means a little bit of water can go very far," said Barb Naramore, assistant DNR commissioner. "It's a very challenging part of the world to do flood risk management."

The idea for a plan to divert floodwaters gained momentum after a historic flood in 2009, when the Red River overflowed its banks and crested at a record 40.8 feet. Economic activity in the Fargo-Moorhead area halted for nearly two weeks, and volunteers filled the local sports stadium with 7 million sandbags.

"It was epic," Williams said of the 2009 flood. "It reminded us all of how intense a flood could be."

Another catastrophic flood in Fargo and Moorhead could cause more than $10 billion in damages, according to the Flood Diversion Board of Authority.

Tom Landwehr, commissioner of the Department of Natural Resources, said the approved plan represents "a balanced approach" to reducing flood risk while protecting public safety and the environment. During a 100-year flood, approximately 169,000 acres in the Fargo-Moorhead area are subject to flooding. The plan would reduce the amount of flooded land by 57,000 acres, while exposing about 12,000 acres to new flooding potential.

"Unfortunately, it isn't possible to build a large flood protection project without adversely affecting some people, and the Fargo-Moorhead Diversion Project is no exception," Landwehr said.

In a statement Thursday, Gov. Mark Dayton said the plan was an improvement over one proposed in 2016, including a better balance between the potential impact between Minnesota and North Dakota. The Dayton administration had opposed the previous project proposal based in part over concerns that Minnesota would lose thousands of acres of farmland to protect Fargo.

"Reliable and effective flood protection for the cities of Moorhead and Fargo and their surrounding regions is essential," Dayton said in a statement. "It is a prerequisite for successful future economic growth, business expansion, job creation, and social vitality."

According to a map of the project, the plan calls for a dam upstream from the cities and a 30-mile channel to divert a portion of the floodwaters around the west side of Fargo. It also includes dams and other water control features on the Red River and the Wild Rice River in North Dakota.

The conditional permit approved Thursday culminates a six-year environmental review process, in which the DNR considered more than 1,800 public comments and analyzed 33 project alternatives. Even with the permit, construction may not begin until spring of 2019, Williams said. That's because additional DNR permits are required, and the project must obtain other local, state and federal approvals.

The project's hefty price tag presents another major hurdle. The estimated $2.75 billion cost will be paid for through a combination of local, state and federal funding sources. Because of increased project costs, local officials need to seek an additional $300 million from the state of North Dakota, $300 million from the federal government, and $43 million from the state of Minnesota. About $1 billion of the project's cost will be funded locally through existing sales taxes.

"This is a major milestone for the project, but we still have a long way before we cross the finish line," Mary Scherling, vice chairwoman of the Flood Diversion Board Authority and Cass County Commissioner, said in a statement.

Chris Serres • 612-673-4308 Twitter: @chrisserres