Bolivian president Evo Morales has announced he will be scrapping the controversial plan to build a highway through an Amazon ecological reserve that has triggered widespread protests.

Mr Morales told reporters he had sent an amendment to Congress, controlled by government supporters, halting the plans for the road through the Isiboro Secure National Park and Indigenous Territory (TIPNIS).

"Therefore, the issue of the TIPNIS has been resolved," Mr Morales said.

"This is governing by obeying the people."

Mr Morales made the announcement just ahead of a meeting with representatives of some 2,000 Indigenous people who entered La Paz on Wednesday (local time) after a two-month march from their ancestral homeland in the Amazon lowlands to press Mr Morales to cancel the project.

He said the decision also "declares the TIPNIS an untouchable zone", which strengthens protection against mining and logging in the area, and also allows police to remove any outsiders that may enter the zone. Amazon natives feared that landless Andean Quechua and Aymara people - Bolivia's main indigenous groups and Morales supporters - would flood into the road area and colonise their land.

The marchers, who set out in August and trekked 600 kilometres to the capital, were met as heroes as they entered the city in the high Andes and made their way to the presidential palace. About 50,000 people from three different native groups live in the remote territory in the humid Amazon lowlands.