China's Three Gorges Project Corp has agreed to obey a state order and stop work on some construction sites amid environmental concerns.
China is trying to improve its environmental credentials
The firm that runs the world's largest hydroelectric project had previously refused to stop construction.
Work will now stop at an underground power station, a supply unit on the Three Gorges Dam and a power station on its sister Xiluodu dam.
The company had been threatened with fines if it continued construction.
Last week, China called for work to be suspended on 30 large-scale projects because they had failed to carry out proper environmental impact checks.
China's State Environmental Protection Administration (SEPA) said that all 30 projects "are in the midst of rectification".
"After communicating with the environmental administration, officials of the Three Gorges Project said they had a more exact and comprehensive understanding of the environmental rule," SEPA said.
Cost of development
The BBC's Beijing correspondent Louisa Lim said that China's leadership have become increasingly concerned about the environmental cost of China's economic boom.
Previously, the Chinese administration had encouraged the building of new electricity generating projects to solve chronic energy shortages.
Agency SEPA, backed by the government, has started to flex its muscles.
It risks making powerful enemies with ministries, who fear losing money if work is stopped, the BBC correspondent said.
The Three Gorges Dam led to more than half a million people being relocated, drawing criticism from environmental groups and overseas human rights activists.
Its sister project, the Xiluodu Dam, is being built on the Jinshajiang - or "river of golden sand" as the upper reaches of the Yangtze are known.