The Outgoing US President Barack Obama has permanently banned offshore oil and gas drilling in the "vast majority" of US-owned northern waters.
Barrack Obama designated areas in the Arctic and Atlantic oceans as "indefinitely off limits" to future leasing, an attempt to protect the region before he leaves office in January.
Canada will review the move every five years with commitment to a similar measure in its own Arctic waters, in a joint announcement with Washington, But the White House insists Mr Obama's declaration is permanent.
The White House said the decision was for "a strong, sustainable and viable Arctic economy and ecosystem." It cited native cultural needs, wildlife concerns, and the "vulnerability" of the region to oil spills as some of the reasons for the ban.
During the election campaign, Donald Trump said he would take advantage of existing US oil reserves, prompting concern from environmental groups.
But supporters have already suggested that any attempt to reverse the "permanent" decision outlined by the law (1953 law which allows the president to ban leasing of offshore resources indefinitely) would be open to a legal challenge.
Reacting to the Arctic declaration, Friends of the Earth said: "No president has ever rescinded a previous president's permanent withdrawal of offshore areas from oil and gas development.
As supporters of president-elect Donald Trump could find it difficult to reverse the decision. "If Donald Trump tries to reverse President Obama's withdrawals, he will find himself in court."
However, the American Petroleum Institute said "there is no such thing as a permanent ban," and that it hoped Mr Trump's administration would simply reverse the decision.
Rex Tillerson, chief of oil company Exxon Mobil, has been named his secretary of state. His energy secretary, Rick Perry, has previously called for less regulation of the oil industry in his role as governor of Texas.
Very little oil drilling currently takes place in the Arctic region, as it is more expensive and difficult than other available options.