Environmentalists are heralding a new law protecting a large swath of wetlands in Panama City from a real estate boom that had been destroying the critical ecosystem.

The law signed by President Juan Carlos Varela and which took effect Monday bans construction and the removal of vegetation from more than 200,000 hectares of muddy mangroves stretching along the capital's Pacific Ocean coastline.

The area is a refuge for some 1 million North American shorebirds who migrate annually to the Bay of Panama, including 30 percent of the world's Western Sandpiper population.

Environmentalists have been warning of the unrestrained development that has underscored breakneck economic growth over the past decade. Varela's predecessor and billionaire businessman Ricardo Martinelli tried to lure mega-hotels and golf courses to the area by slashing environmental fines.