Dillon District Ranger Tom Osen has withdrawn his decision to implement a prescribed burn in the Beaverhead-Deerlodge National Forest, citing a ruling by a federal appeals court.

The Birch Creek project involved burning and thinning on 930 acres about 20 miles northwest of Dillon and was aimed at reducing hazardous fuels.

In March, two conservation groups filed a lawsuit against the U.S. Forest Service and Regional Forester Tom Tidwell to stop the project, saying it would destroy important sage and juniper habitat.

The Alliance for the Wild Rockies and the Native Ecosystems Council also claimed Osen had applied an illegal ‘‘categorical exclusion’’ to the project, meaning it underwent no environmental analysis.

Such exclusions limit public involvement and are meant for projects that have no significant environmental impact, according to Michael Garrity, executive director of the Helena-based Alliance for the Wild Rockies.

Osen announced last week that he was withdrawing his support for the Birch Creek project. He cited a decision by the 9th U.S. Circuit Court of Appeals declaring categorical exclusions for hazardous fuels reduction invalid.

‘‘In the event the Forest Service proposes or conducts activity in the Birch Creek area in the future, we will complete new environmental analysis consistent with applicable law, including public involvement, and issue a new decision,’’ Osen wrote in a July 31 letter to forest users.

He did not immediately return a call Tuesday seeking comment. However, Jack de Golia, public affairs officer for the Beaverhead-Deerlodge Forest, said the Forest Service began the project under a legal category, and ‘‘in the middle of the project, the category was disallowed.’’

The purpose of the project was to reduce the amount of older vegetation in the area, which would mean less-intense wildfires during fire season, de Golia said. He didn’t know whether the Forest Service would try to find another way to make the project happen.

‘‘At this point, we’re not going to go forward with the project as it was constituted,’’ he said. ‘‘But as far as I know, there’s been no final decision yet.’’

Garrity said the Forest Service should have halted the Birch Creek project when the conservation groups first took their complaint to the regional forester.

‘‘Instead, the Forest Service wasted taxpayers’ money by forcing us to take them to court,’’ he said Tuesday.

Sara Johnson, director of the Three Forks-based Native Ecosystems Council, said the Birch Creek project included ‘‘known, occupied sage grouse habitat.’’

Effects of the proposed project would have been significant because of previous burns in the area, she said.

‘‘Sage grouse is currently being considered for listing under the Endangered Species Act by the U.S. Fish and Wildlife Service, largely due to loss of habitat,’’ Johnson said.

She added juniper habitat in the area provides important big game winter range.

Other species that would have been affected by the burn include the flammulated owl, pigmy rabbit, northern goshawk and Brewer’s sparrow, Johnson said.