The Biden administration has waived sanctions on the company behind Russia's Nord Stream 2 gas pipeline to Germany and its chief executive, Secretary of State Antony Blinken says.
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The move was immediately decried by critics of the project in Congress.
A state department report concluded that Nord Stream 2 and its CEO, Matthias Warnig - an ally of Russian President Vladimir Putin - engaged in sanctionable activity.
But Blinken immediately waived those sanctions, saying it was in the US national interest.
The decision came as the Biden administration seeks to rebuild ties with Germany, after relations deteriorated under former president Donald Trump.
"Today's actions demonstrate the administration's commitment to energy security in Europe, consistent with the President's pledge to rebuild relationships with our allies and partners in Europe," Blinken said in a release, issued as he met with Russian Foreign Minister Sergei Lavrov in Iceland for an Arctic Council conference.
President Joe Biden has opposed the $US11 billion ($A14 billion) project that would take Russian gas from the Arctic to Germany, saying it is a bad deal for Europe.
The United States is an exporter of natural gas to Europe but Russian gas is cheaper.
Washington fears Russia could use Nord Stream 2 as leverage to weaken European Union states by increasing dependency on Moscow.
Russia's state energy company, Gazprom, and its Western partners are racing to finish the pipeline to send natural gas under the Baltic Sea.
The project, now about 95 per cent complete, would bypass Ukraine, depriving it of lucrative transit fees and potentially undermining its struggle against Russian aggression.
At the rate it is being constructed, Nord Stream 2 will be finished before the end of the year, if not sooner, analysts said.
Senator Jim Risch, the senior Republican on the Senate Foreign Relations Committee, said the waivers will be "a gift to Putin that will only weaken the United States' leverage in the lead up to the impending Biden-Putin summit".
Biden "should do everything possible to accomplish what the Trump administration failed to do for four years: stop the completion of the Nord Stream 2 pipeline for good," said Senator Bob Menendez, a Democrat and chair of the committee.
Germany has been pressing for the United States to drop its opposition to the project, arguing the overall relationship was too important to sacrifice over what Berlin has described as a commercial project.
"We see this as a constructive step," German Foreign Minister Heiko Maas said.
Russian officials signalled on Wednesday that waivers could help mend Washington's fraught ties with Moscow.
Australian Associated Press
