Opponents of House Bill 2 protest across the street from the North Carolina State Capitol in Raleigh, N.C., April 11, 2016.
Opponents of House Bill 2 protest across the street from the North Carolina State Capitol in Raleigh, N.C., April 11, 2016.

The U.S. Justice Department says a controversial law in the state of North Carolina limiting legal protections for lesbian, gay, bisexual and transgender people violates federal civil-rights law and must not be enforced.

In a written notice to the state's governor, Pat McCrory, U.S. officials directed North Carolina to confirm that that the new law will not be enforced or risk being sued by the federal government.

If North Carolina disregards the U.S. government's position, it could put at risk hundreds of millions of dollars the state normally receives to support its schools and universities.

The North Carolina law limits legal protections for members of the LGBT community and requires transgender people to use only public bathroom facilities that correspond to the gender listed on their birth certificates.

Transgender is used to describe people who identify with or express a gender identity different from one they were born with - for example, someone born male who chooses to live as a woman.

The Justice Department said North Carolina's LGBT law, known there as House Bill 2 or H.B. 2, violates the U.S. Civil Rights Act, the foundation of all civil-rights legislation in the United States.

The act, which dates back to 1964, prohibits discrimination based on race, color, religion, sex or national origin. It has been used to end racial segregation in schools, workplaces and public facilities (also known as "public accommodations"), and to overturn local election rules used to discriminate against minorities.

North Carolina Gov. Pat McCrory at the governor's
FILE - North Carolina Gov. Pat McCrory at the governor's mansion in Raleigh, N.C., April 12, 2016.

The government's notice to the state and Governor McCrory set a deadline of Monday, May 9, for North Carolina to abide by the terms of the federal order.  

Since its passage in March, North Carolina's LGBT law has stirred strong controversy and aroused demonstrations both for and against its provisions. Rock-music star Bruce Springsteen and other figures from the entertainment world cancelled appearances in North Carolina in protest against H.B. 2. More than 140 businesses have signed a letter protesting the measure, among them Apple, Microsoft and Coca-cola.

A Democratic state lawmaker who opposes the law, Chris Sgro, said the federal government's action "confirms what we've already known, that H.B. 2 is deeply discriminatory ... and needs to be repealed as soon as possible."

Sgro, who also is executive director of Equality NC, a rights group, estimated the economic impact of the law at $500 million already, not including the potential loss of federal funds for state institutions, such as $861 million allocated for North Carolina during the current school year.