SAN JUAN, Puerto Rico—A pristine swath of Puerto Rico's north coast that developers have long coveted is now a nature reserve, ending a bitter and lengthy battle between the government and environmentalists.

Gov. Luis Fortuno signed a law late Monday protecting 1,950 acres (790 hectares) of state-owned land from large-scale development, reversing a stance he took several years ago when he revoked its protected status to attract developers and boost the island's sluggish economy.

Both the House and Senate already had unanimously approved the bill.

Carmen Guerrero, an environmental planner for a local coalition that fought for the designation, said Tuesday that the move is significant because the lands had been considered prime real estate.

"They are smack on the beach," she said. "We are extremely satisfied and content."

The property's turquoise waters and lush vegetation had caught the eye of hotel chains including Marriott International Inc. and Four Seasons Hotels Inc., which had talked with the government about the land. The new nature reserve designation prohibits construction of large resorts, but allows for ecotourism-related activities, including construction of hotels with a maximum of 70 rooms.

The new reserve makes up 66 percent of what is known as the Northeast Ecological Corridor, located just north of El Yunque rainforest, a popular tourist attraction. The reserve also is considered one of the prime nesting sites for the endangered leatherback turtle.

Environmentalists now aim to protect another 1,011 acres (409 hectares) of privately owned land within the corridor on which developers are still allowed to build projects such as resorts, commercial centers and residences, said coalition member and environmental scientist Luis Jorge Rivera.

The local planning board is still studying a proposal to build a mall on one of those private properties, although Rivera said construction would violate the new law that calls for the preservation and conservation of land within the corridor, even if it is not designated a nature reserve.

The coalition also will seek to reincorporate another 290 acres (117 hectares) that were previously protected when former Gov. Anibal Acevedo Vila established the Northeast Ecological Corridor in April 2008. Fortuno had removed that protection in 2009.

Puerto Rico has dedicated only 8 percent of its land to preservation and conservation, while the Dominican Republic protects 42 percent of its land and the U.S. Virgin Islands 54 percent, according to conservation bill signed by the governor.