Interior Department deputy communications director Russell Newell said Wednesday that the Trump administration "chose not to move forward" with California Gov. Jerry Brown's proposed $16 billion project to build two giant tunnels.
The statement marks the first public position by the Trump administration on the tunnels project.
The decision is the latest and one of the most significant setbacks for Brown's hopes of re-engineering the state's north-south water delivery system. The tunnels still require additional federal approval to move forward, though individual water districts are supposed to pay the costs of the project.