Christo's Over the River project cleared a legal hurdle with a judge upholding state parks officials' approval of the project.
Denver District Court Judge Robert McGahey ruled late Thursday that the state did not act in "an arbitrary or capricious" manner in approving the project.
The group, Rags Over the Arkansas River, which filed the lawsuit says its considering filing an appeal. Another lawsuit is pending in federal court.
Christo envisions suspending 5.9 miles worth of shimmery fabric panels over parts of a 42-mile stretch of the Arkansas River traced by U.S. 50 in southern Colorado. Work to erect the piece, including installing the anchors and cables to hold the fabric, would unfold over about 28 months.
The display on schedule for August 2015 would be dismantled after two weeks.