(CNN) The city of Seattle has filed a lawsuit challenging President Donald Trump's executive order on so-called sanctuary cities, calling it "fatally ambiguous" and unconstitutional.

"The Order is premised on a misreading of federal statutory law and departs dramatically from settled constitutional principles," the lawsuit, filed by Seattle Mayor Ed Murray and City Attorney Pete Holmes, states.

The suit challenges the legality of the executive order, signed by Trump in late January, that takes aim at so-called "sanctuary" jurisdictions by threatening to withhold federal grants. White House press secretary Sean Spicer said in a news briefing the order will "strip federal grant money from the sanctuary states and cities that harbor illegal immigrants."

A sanctuary city is a broad term that refers to cities or states with policies in place that limit involvement in federal immigration enforcement. The Trump administration has argued that cities should collect the citizenship status of its residents and report that information to federal officials.

Suit claims order 'unclear'

But many large cities, including Seattle, limit the collection of citizenship information by its local law enforcement, which is not actively required by federal law. These cities also largely do not honor requests from Immigrations and Customs Enforcement to detain individuals beyond what is allowed by criminal proceedings.

These cities argue that immigrants are more willing to cooperate with law enforcement and seek health assistance if they do not fear they may be deported when doing so.

The suit has two main thrusts. First, it argues, Seattle is not in violation of the relevant federal statute, known as Section 1373. And second, the executive order's meaning is unclear and it is unconstitutional, as it violates the 10th amendment.

"It uses terms that are vague and not defined, does not spell out the particular enforcement objectives of the Secretary and Attorney General, and does not describe in an intelligible manner the federal Executive Branch's understanding of the requirements purportedly imposed by Section 1373," the lawsuit reads.

Mayor: City will stand with immigrants, refugees

The order also violates the Spending Clause, the lawsuit argues, and is causing "immediate harm" to Seattle by hampering its budget process. About $55 million of Seattle's 2017 operating expenses comes from federal funding, and more funding is dedicated to longer-term capital investments, the city said.

In a statement, Seattle Mayor Ed Murray said the city will continue to stand with its immigrant and refugee populations.

"Seattle will not be bullied by this White House or this administration and today we are taking legal action against President Trump's unconstitutional order," he said.

The lawsuit names Trump, Attorney General Jeff Sessions and Secretary of Homeland Security John Kelly as defendants.