The federal Environmental Protection Agency announced Tuesday that it was designating the Gowanus Canal in Brooklyn a contaminated Superfund site, paving the way for a cleanup of decades-old pollution there.

The decision comes as a blow to the Bloomberg administration, which had proposed a cleanup under its own supervision that would avoid such a designation. The city argued that the federal designation could set off legal battles with polluters, defer completion of the cleanup and torpedo construction by developers deterred by the stigma of a Superfund label.

“After conducting our own evaluations and consulting extensively with the many people who have expressed interest in the future of the Gowanus Canal and the surrounding area, we have determined that a Superfund designation is the best path to a cleanup of this heavily contaminated and long neglected urban waterway,” Judith Enck, the E.P.A. regional administrator, said in a statement.