Trans Teen's Lawsuit Against School Can Go Forward, Appeals Court Rules The federal appeals court sided with the teen.

 -- A federal appeals court in Virginia ruled that a trans teen who had filed a lawsuit against his Virginia high school after being denied access to the boys' bathroom can proceed with his case.

A three-judge panel for the 4th U.S. Circuit Court of Appeals ordered a district court to reevaluate a preliminary injunction filed by 16-year-old Gavin Grimm and the American Civil Liberties Union (ACLU), arguing that the lower court's original dismissal was based on inappropriate standards. It also revived their Title IX lawsuit, ruling the lower court had used faulty criteria in dismissing the Gloucester High School student's sex discrimination claim.

The ruling essentially allows Grimm to continue to sue the Gloucester School District, but he is still barred from using the boys' bathroom as his case moves forward through the courts.

Grimm, 16, felt "relieved" after the court's ruling, he said in a statement through the ACLU.

“Today’s decision gives me hope that my fight will help other kids avoid discriminatory treatment at school," Grimm said.

The Gloucester School Board declined to comment on the court's decision when contacted by ABC News.

In an interview with ABC News in June, Grimm said he had been adhering to the policy at school, but called the situation “stressful and humiliating.”

"It makes it impossible for me to live as myself peacefully,” Grimm said in July. “The issue has outed me on grand scale, which should never have to happen to anyone."

Grimm was born female but identifies as male. He was allowed to use the boys’ restroom at the high school in 2014 for several weeks after informing the school about his transition and receiving permission from the school principal, he said.

The school board adopted a policy, in December of that year, after some parents complained, requiring students to use either the restroom that corresponds with their biological gender or a private, single-stall.

The announcement was made after the school board voted 6-1 in favor of the new policy, according to the public meeting minutes posted online.

The majority of the 37 members of the public who commented at the meeting expressed opposition to Grimm's use of the boys' restroom, according to the federal lawsuit suing the school board.

"One speaker called him a 'freak' and compared him to a person who thinks he is a 'dog' and wants to urinate on fire hydrants," the ACLU alleged in the court complaint.

In July, the U.S. Justice Department filed a “statement of interest” in Grimm’s case, declaring that a failure to allow transgender students to use the restroom that corresponds with their gender identity amounts to sex discrimination, the AP reported.

Grimm's parents helped him legally change his name. A psychologist diagnosed him with gender dysphoria, characterized by stress stemming from conflict between one’s gender identity and assigned sex at birth, according to the AP. Grimm then began hormone treatment to deepen his voice and give him a more masculine appearance.

In a statement, the ACLU called the ruling "vindication" for Grimm.

“Gavin’s fight has been a beacon of hope in the face of increasingly hostile rhetoric against transgender people in Virginia, and across the nation,” said Gail Deady, The Secular Society Women’s Rights Legal Fellow at the ACLU of Virginia. “The court’s ruling sends a strong message to schools and lawmakers that discriminatory restroom policies don’t just harm transgender students, they put Title IX funding at risk.”

ABC News' Avianne Tan contributed this this report.