"The decision has vindicated the government's position. We will now approach the Centre to issue the final notification," Chandy said.
The move to implement the Madhav Gadgil and Kasturirangan reports on Western Ghats conservation had sparked raging protests in the upland areas of the state last year.
The UDF Government had approached the Centre seeking modification in the Ecologically Sensitive Areas (ESA) list after physical verification to exclude human settlement areas from the ambit of the ESA.
Leaders of the High Range Protection Council, spearheading the agitation against the report, expressed dissatisfaction at the NGT order and said they would go in appeal to the Supreme Court.
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The council and similar resistance groups in other parts of the affected areas, some of them backed by the Catholic Church, had expressed apprehensions that the implementation of the Kasturirangan report would lead to large-scale displacement of millions of people and deprive them of their livelhihood.
CPI(M) leader M M Mani, who leads the party in Idukki, said an agitation would be launched to protect the interests of people living in hilly areas for generations.