John Halikowski, director of Arizona's Department of Transportation, halted the bridge project that was being paid for with federal highway funds.
"ADOT will not spend funds simply because they are available," he said in a statement.
"Protection of the red squirrel may be an appropriate effort," Halikowski said, "but not with transportation funding."
The money was being spent, officials said, because cars kill about five of these squirrels each year. The Mount Graham red squirrel is on the endangered species list.
The cancellation came after news reports, including one from ABC News, highlighted the planned expenditure.
Halikowski did not specify how the $1.25 million would be used now, but said in his statement "if necessary, the department will forfeit the $1.25 million project cost and return the funds to Washington, D.C." rather than spend it on squirrels.
David Kincaid, city manager of the nearby town of Safford, welcomed the news.
"People were just bewildered about why would we spend $1.25 million on a project like this," he said. "I think it's probably best that it was handled this way."
The DOT planned to install 41 "canopy tunnel crossings," essentially ropes over the road, at a cost of $400,000. Another $160,000 was to be spent on cameras to monitor the bridges, and the rest of the money will fund a project to monitor the rodents.
They are called "canopy tunnel crossings" because they were to include a mesh tunnel through which only the Mount Graham red squirrels – and not other larger squirrel species – could fit. The tunnel would have protected the squirrels from predators like birds of prey.
The bridges also were to have an easy release mechanism to allow workers to disconnect them from the trees in the event that a tall truck needed to drive up to the Mount Graham International Observatory at the top of the mountain, or in the case of a forest fire.
Sen. John McCain Opposed to Squirrel Bridge
Tim Snow, non-game specialist at the Game and Fish Department, monitors the population of the squirrels on a yearly basis. He said the population fluctuates from year to year, but it has averaged 250 squirrels over the last 10 years. In the nineties, the squirrels numbered between 300 and 350.
A variety of factors are responsible for the population decline, Snow said.
"The biggest threat to the squirrel is loss of habitat," he said. A wildfire in 2000 destroyed a quarter of the squirrels' habitat, which Snow said is one of two major sources of habitat loss. Insects on the trees are the other major threat.
"The basis of the project is recognizing that traffic on Mount Graham in southeast Arizona is creating impacts on the environment," Arizona Department of Transportation Community Relations Director Timothy Tait said before the project was canceled. Each day, an average of 650 cars use the lower, paved portion of the road, and 150 cars travel on the gravel portion of the road.
According to Snow, motorists cause roughly five squirrels' deaths each year. Assuming the bridges work and no squirrels die, over 100 squirrels could be saved throughout the 20 to 25 year lifespan of the bridges.
Community response had been overwhelmingly negative, according to Kincaid.
Sen. John McCain, R-Ariz., who has repeatedly criticized what he deems wasteful government spending, was asked about the squirrel bridge meeting in the town of Clifton.
"He expressed opposition to the Mount Graham red squirrel preservation effort, saying it puts unreasonable limits on forest resources that could be used to help the community's economy," McCain spokeswoman Brooke Buchanan told ABCNews.com.
The day before the squirrel bridge was canceled, Graham County Supervisor Mark Herrington joined the chorus of criticism.
"I don't think it's the smartest allocation of resources," he said. "With all the problems were facing today, with the economy the way it is…that's a huge expense and how do you guarantee that the squirrels are going to cross the bridge?"
Herrington said he was not consulted about the project. Instead, the Department of Transportation sent him a letter announcing the start of the project a few weeks ago.
"We could have used this money to improve roads for our citizens," Herrington said. "There are 600 miles of bad roads in Graham County that need to be improved for the people that live here."