The announcements come after USA president Joe Biden signed an executive order to revoke the pipeline's permit on his first day in office in January - a move he had promised during his election campaign.
The pipeline's construction was first delayed in 2015 under Barack Obama before being revived under Donald Trump in 2017.
This is a breaking story and will be updated as more information becomes available. The release said final costs to the government are expected to be approximately $1.3 billion, as previously estimated.
"We invested in Keystone XL because of the long-term economic benefits it would have provided Albertans and Canadians", said Energy Minister Sonya Savage in a news release. The company and province plan to try to recoup the government's investment, although neither offered any immediate details on how that would happen.
The province had hoped the pipeline would spur increased development in the oil sands and bring tens of billions of dollars in royalties over decades.
The project was first proposed in 2008 as an extension of the existing Keystone Pipeline network.
"President Biden killed the Keystone XL Pipeline in the name of "clean energy" but waived sanctions in order to allow the construction of Russia's Nord Stream 2 pipeline". Republicans in Congress have made the cancellation a frequent talking point in their criticism of the administration, and even some moderate Senate Democrats including Montana's Jon Tester and West Virginia's Joe Manchin had urged Biden to reconsider.
While asserting that the Keystone project "would not serve the US national interest", Biden said that his January 20 order is created to "promote and protect our public health and the environment; and conserve our national treasures and monuments, places that secure our national memory".
TC Energy Corporation, the Canadian firm behind the controversial Keystone XL Pipeline officially revoked its bid Wednesday, ending a 13-year political battle between environmentalists and conservatives. "The Company will continue to build on its 70-year history of success and leverage its diverse businesses in natural gas and liquids transportation along with storage and power generation to continue to meet the growing and evolving demand for energy across the continent".
Republicans have already seized on TC Energy's announcement and pointed the recent ransomware attack that shut down the Colonial Pipeline system for several days. It said it has $7 billion in other projects under development.