"I have just received a letter from President Thein Sein," Lower House Speaker Shwe Mann told parliament. "Briefly, he has decided to stop the hydroelectric dam project in Mitzone, in keeping with the wishes of the people."
The 6,000-megawatt plant was to be built in the Kachin State, at the start of the Irrawaddy River, which flows the length of the country to the rice-growing delta region.
The dam was opposed by the Kachin people, conservationists, farmers who depend on the Irrawaddy for irrigation and opposition leader Aung San Suu Kyi.
Suu Kyi last week said a decision to shelve the project would encourage unity in the country.