Northern Ireland Secretary Sir Chris Bryant has banned the contentious Orange Order parade at Drumcree.
The dispute led to a stand-off between Orangemen and nationalist residents of the Garvaghy Road in Portadown lasting almost two weeks.
Sir Chris said the chief constable advised him "it would not be possible to enable the procession to happen without a major intervention which would carry an unacceptable risk of serious injury, disorder and a wider contagion effect across Northern Ireland".
His decision has been welcomed by Sinn Féin and the SDLP, but the DUP leader said he now needs to "explain what his government intends to do to restore confidence in the rule of law".
The stalemate has reopened what was once the most bitter parading dispute in Northern Ireland, with stand-offs in the mid-to-late 1990s accompanied by riots, roadblocks and killings.
The Grand Orange Lodge of Ireland has applied to complete the full march for the past 28 years, with exceptions such as during the Covid pandemic - but every year has been denied permission by the Parades Commission.
For decades, the situation at Drumcree has settled into a relatively minor stand-off that no longer made headlines, however that changed when the Parades Commission ruled that the march, on Sunday 27 September, could go ahead with restrictions in place.
That parade did not happen and, after a series of talks between residents and Orangemen, the secretary of state has banned the procession.
Under legislation, a secretary of state can overturn a Parades Commission determination, especially following input from the police.
Sir Chris had been coming under increasing pressure from Sinn Féin and the SDLP to stop the parade.
Chief Constable Jon Boutcher had asked the secretary of state to review the Parades Commission determination allowing the parade.
On Friday night, Sir Chris said: "The Parades Commission have advised me that while ultimately a matter for the courts to determine, the commission is of the view that, in light of this current assessment by the chief constable, the original determination does not now have enduring legal effect.
"Consequently, and in the interests of wider public interest and safety, I've come to the conclusion that the circumstances under which that decision was made have now changed considerably.
"As a result, the procession cannot go ahead as it was determined."
Speaking about Sir Chris' decision, Boutcher said he had outlined to the secretary of state his "current assessment was that all available, lawful and proportionate options to facilitate completion of the procession had been exhausted".
"Any remaining options would have required a substantial public order intervention," he said.
He added: "Further to this, such an operation would in my view have had not only catastrophic long-term consequences for trust and confidence in policing, but for the Northern Ireland Executive and the peace process."
In a statement, the Parades Commission said it "recognises the importance of resolving the issues arising from this dispute and hopes that a way forward can be found through constructive engagement between those concerned".
Earlier, First Minister Michelle O'Neill confirmed she had received a letter from police investigating protests over the Drumcree parading dispute.
On Thursday, the police said they had begun issuing letters inviting people "reasonably suspected" of committing offences linked to the protests to interview.
There were jubilant scenes at a community hall off Garvaghy Road as the decision over the Drumcree parade was confirmed.
Speaking outside the centre, Breandán Mac Cionnaith of the Garvaghy Road Residents Coalition (GRRC) said that "while this is a win for us tonight, it is one that is still tinged with sadness and with loss".
"There's no real cause for celebration that we have to remember the price that was paid to get this decision over many years."
One woman was heard saying: "Best news we've had in years," while another shouted: "No going back."
Sinn Féin President Mary Lou McDonald said the overwhelming sense on the road was "one of relief and one of joy", adding that this "awful threat and this sense of menace has been lifted from the community".
"To have had the prospect of a march down the road was just incomprehensible, nobody could believe that this decision had been landed and the community said from the get go that they would stand strong and united and that they would not have it and they have. Right has won out here."
