North Carolina Gov. Roy Cooper, a Democrat, and top Republican legislators in the state say they have reached a tentative compromise on a repeal of the so-called “bathroom bill,” after the NCAA announced it would not consider the state for championship events from 2018 through 2022 unless changes were made to a law it considers discriminatory.

The repeal bill would wipe away the state’s existing law, House Bill 2, or HB2, which requires transgender people to use public restrooms that correspond to the sex on their birth certificate, when present at schools and government buildings.

But it would also preserve state legislators’ power to set policy on the issue, by prohibiting local governments from passing pro-LGBT nondiscrimination ordinances until December 2020. Republican leaders in the state House and Senate said that would allow for pending federal litigation on the matter to be resolved.

"Compromise requires give and take from all sides, and we are pleased this proposal fully protects bathroom safety and privacy," GOP Senate leader Phil Berger and House Speaker Tim Moore said in a statement.

Its passage would seem to underscore the clout possessed by sports organizations who threatened to relocate billions of dollars’ worth of events traditionally held in North Carolina if the state did not act to ensure a “discrimination-free atmosphere” for those events by Thursday.

The NCAA, which did not hold tournament events in North Carolina this year because of the bill, has said it will begin deciding this week whether to grant hosting rights for future events. It has not weighed in on the proposal. The National Basketball Association, which moved this year’s All-Star Game from Charlotte, and the collegiate Atlantic Coast Conference, which moved 10 of its neutral-site league championship events from North Carolina, joined in the boycott. An Associated Press analysis from this week estimated that more than $3.7 billion would be rerouted from the state over 12 years as a result of HB2.

HB2 was born from conservative angst over safety concerns, after Charlotte’s city government passed a law in February 2016 allowing transgender people to use the bathroom of their choice. But earlier efforts to repeal a law unpopular with business leaders and some 61 percent of the state’s voters broke down amid partisan distrust, The Christian Science Monitor’s Patrik Jonsson reported in December:

But the incident was just a glimpse of the deeper fault lines increasingly driving politics in the state. Riven by political betrayals, racially gerrymandered districts, bitterness between rich and poor counties, and a deep sense of rebellion against what conservatives see as attempts by national corporations and local politicians to impose a social engineering program in the state's bathrooms, North Carolina is in the middle of an identity crisis.

What happens now is a test of how a state can move forward when its government is split and both sides appear irreconcilable.

LGBT-rights groups that had pushed for an unconditioned repeal decried the bill, saying it would restrict anti-discrimination protections.

"At its core, it's a statewide prohibition on equality," Chad Griffin, president of the Human Rights Campaign, told reporters on Wednesday, according to the AP, warning of potential consequences for Governor Cooper, who won office last fall with LGBT activists’ support on a platform that included a full repeal.

"Just like we did with” previous Republican Gov. Pat McCrory, who signed the law, “we will hold all elected officials accountable – Democrats and Republicans – who target our community by advancing this statewide ban on nondiscrimination protections,” said Mr. Griffin.

Mr. Cooper said in a release that he supported the compromise as a way to begin restoring the state’s reputation.

"It's not a perfect deal, but it repeals House Bill 2 and begins to repair our reputation," he said.

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The new legislation is set to be debated and voted on Thursday, but it remains unclear whether there will be enough House and Senate votes to pass it.

This report contains material by the Associated Press and Reuters.