 -- The Justice Department has sent a letter informing the state government in North Carolina that the state's House Bill 2 violates the U.S. Civil Rights Act.

The department gave the state until Monday to respond to the letter “by confirming that the State will not comply with or implement HB2.”

A Justice Department source tells ABC News that the Justice Department hopes that the state will comply with the letter voluntarily. If the state does not, the source said that the Justice Department will use other tools at its disposal, but did not specifically list the possible punishments.

In response, Governor Pat McCrory said in a statement that his office will work to determine the next steps in addressing the letter.

“A claim by the Obama administration charges that one part of House Bill 2, which requires state employees in public government buildings and students in our universities to use a restroom, locker room and shower facility that match their biological sex, is now in violation of federal law. The Obama administration has not only staked out its position for North Carolina, but for all states, universities and most employers in the U.S.," the statement reads.

“The right and expectation of privacy in one of the most private areas of our personal lives is now in jeopardy. We will be reviewing to determine the next steps.”

The law, which critics say is anti-LGBT because it discriminates against gay and transgender residents, has been the source of controversy since it was first introduced. But supporters argue the law defends religious liberty and protects girls in public restrooms.

HB2 was signed into law by Gov. McCrory in March, and directs all public schools, government agencies and public college campuses to require that multiple-occupancy bathrooms and changing facilities, such as locker rooms, be designated for use only by people based on their "biological sex" stated on their birth certificate. Transgender people can use the bathrooms and changing facilities that correspond to their gender identity only if they get the biological sex on their birth certificate changed.

The law also declares that state law overrides all local ordinances concerning wages, employment and public accommodations. So, the law bars local municipalities from creating their own rules prohibiting discrimination in public places based on sexual orientation and gender identity.