The move comes a little over a year before the 2024 election, as Biden seeks to shore up his green credentials that were damaged by a decision earlier this year to greenlight a project by US energy giant ConocoPhillips in the same area.
The prohibition covers 10.6 million acres (4.3 million hectares), or 40 percent, of the National Petroleum Reserve in Alaska (NPR-A), an ecologically important region for grizzly and polar bears, caribou and hundreds of thousands of migratory birds.
"Alaska is home to many of America's most breathtaking natural wonders and culturally significant areas," Biden said in a statement.
"As the climate crisis warms the Arctic more than twice as fast as the rest of the world, we have a responsibility to protect this treasured region for all ages."
The US Interior Department said it is also canceling seven remaining oil and gas leases that were authorized under former president Donald Trump in the Arctic National Wildlife Refuge, which lies to the east of the NPR-A, also on Alaska's North Slope.
The state's two Republican senators blasted the White House, saying Biden was undermining US energy security.
"These decisions are illegal, reckless (and) defy all common sense," said Senator Lisa Murkowski.
Democrat Mary Peltola, a member of the House of Representatives, also said she was "deeply frustrated" at what she described as a failure by the Biden government to listen to local desires.
While the Biden plan said it would support the subsistence activities of Alaska Natives, it was met with opposition by prominent members of the North Slope communities.
"Our community fought hard to get the Coastal Plain opened to oil and gas leasing," said Annie Tikluk, mayor of the city of Kaktovik, referring to the canceled leases.
"We are an economically underserved community and are continually looking for economic opportunities for our long-term sustainability."
- Willow project -
Biden came under heavy fire from environmentalists for approving the massive ConocoPhillips oil project in the NPR-A in March.
The Willow project, estimated to cost between $8-10 billion, was authorized under Trump and later backed by Biden, triggering national protests led by youth activists.
Observers have said the announcements to protect more of the Arctic may be in part aimed at defraying some of the criticism aimed at Willow.
The plan would also limit, but not outright ban, drilling in an additional 2.4 million acres of the NPR-A.
It would ban drilling in approximately 2.8 million acres of the Beaufort Sea, "ensuring the entire United States Arctic Ocean is off limits to new oil and gas leasing," a statement by the Interior Department said.
The NPR-A is the largest tract of public land in the United States and was created by former president Warren Harding in 1923. In 1976, Congress directed that the extraction of fossil fuels there must be balanced against the need to protect the environment.
Biden pledged during his presidential campaign to halt all new leasing on federal land and water -- a promise he failed to keep.
Some observers say his decisions were limited by unfavorable court decisions in the face of challenges led by Republican states, and credit the administration for limiting the scope of new developments.
His administration oversaw the passage of the Inflation Reduction Act (IRA), which committed nearly $400 billion to fight climate change.
A study published in the journal Science in July said the IRA would lead to economy-wide greenhouse gas emissions reductions from 43 to 48 percent below 2005 levels by 2035.
But that would still fall short of the US target to cut 50 percent of emissions by 2030.
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