North Carolina Gov. Roy Cooper and the American Civil Liberties Union (ACLU) agreed to settle a federal lawsuit on Wednesday, filing a consent decree allowing transgender people in the state to use the public restrooms that match their gender identities.

The judge presiding over the case must agree to the terms of the consent decree before it becomes law.

The consent decree says that transgender people are not prevented under state law from using public facilities that coordinate with their gender identity.

Cooper, a Democrat, hailed the consent decree as a step toward codifying legal protections for transgender people.

“Earlier this year, I said there was more work to do to protect against discrimination and make North Carolina a welcoming state,” Cooper said. “Today’s executive order and consent decree are important steps toward fighting discrimination and enacting protections throughout state government and across our state.”

The saga over North Carolina's so-called "bathroom bill" began last year with H.B. 2, which required transgender individuals to use restrooms in government buildings that matched the gender on their birth certificate.

That measure was replaced in March by H.B. 142, which rolled back the provision.

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But LGBT activists and advocacy groups said that the new law continued the harm of its predecessor by putting the authority to make rules about public restrooms in the hands of the North Carolina General Assembly and barring local governments from passing ordinances or offering guidance on the matter.

The ACLU and Lambda Legal, an LGBT legal group, filed a lawsuit in July challenging H.B. 142, arguing that the law stripped localities of passing anti-discrimination protections and barred the regulation of restroom access in public facilities.

“H.B. 2 and H.B. 142 remain shameful and discriminatory attacks on LGBT people that should never have been signed into law, but under this proposed consent decree North Carolina would finally affirm the right of transgender people to use facilities that match their gender,” Karen Anderson, the executive director of the ACLU of North Carolina, said in a statement.