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North Carolina and the American Civil Liberties Union (ACLU) have settled a suit over the state’s discriminatory “bathroom bill,” allowing transgender people to use bathrooms that correspond to their gender identity. Gov. Roy Cooper, a Democrat, announced the consent decree deal on Wednesday.

While the original law, House Bill 2, was repealed in March, it was replaced by House Bill 142. LGBTQ activists and advocacy groups argued that the new law failed to protect transgender people because it still allowed the North Carolina General Assembly to regulate public bathrooms. HB 142 also instituted a moratorium on local anti-discrimination ordinances through 2020.

As a result, the ACLU and Lambda Legal filed a lawsuit challenging HB 142 in July on behalf of six plaintiffs. In the suit, they alleged the new law remained just as discriminatory as the last since it left regulation of public bathrooms to state lawmakers.

But Wednesday’s announcement signaled an end to the ACLU’s legal challenge. “For too many reasons, it is not in our state’s best interest to remain in drawn-out court battles that still linger because of HB2,” Cooper said in a statement. “As a state, we need to work together to make North Carolina more welcoming, and I am pleased that we could come together with the other party in this case to show that we agree.”

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In conjunction with the settlement, Cooper also announced the introduction of an executive order banning discrimination based on race, gender, or sexual orientation in his administration and for contractors that work with the state government. “Today’s executive order and consent decree are important steps toward fighting discrimination and enacting protections throughout state government and across our state,” he said.

A judge must approve the consent decree before the lawsuit is fully resolved. Specifically, the deal stipulates that “transgender people are not prevented from the use of public facilities in accordance with their gender identity.”

There is, unfortunately, still an opportunity for North Carolina’s Republican-held State Assembly to challenge the consent decree that was submitted Wednesday. However, it’s unclear if they will intervene.

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Karen Anderson, executive director of the ACLU of North Carolina, praised the settlement in a statement. “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,” she said.