Google received initial approval for the data center in early 2020, but the project has since sparked protests from residents and local officials over the potential impact on the capital's parched aquifer.

Google will rework from scratch its plans to build a $200 million data center in Santiago after concerns were raised about its environmental impact in the Chilean capital, the U.S. technology giant said in a statement on Tuesday.

In February, a local environmental court partially revoked a 2020 permit allowing the company to build the data center, asking Alphabet's Google to revise its application to take into account the effects of climate change.

Google received initial approval for the data center in early 2020, but the project has since sparked protests from residents and local officials over the potential impact on the capital's parched aquifer.

Chile has been suffering from a drought for more than a decade and data servers require millions of liters of water a year for cooling, as they are energy intensive and heat could affect the data.

The company informed Chile's environmental regulator that it "will not continue with the permit application process for the project to install a data center in the Cerrillos neighborhood, as originally submitted and approved in 2020," the statement said.

"In due course, a new process will begin from scratch for a project using air-cooled technology, at this same location," Google added.