Oregon Labor Commissioner Brad Avakian ordered Aaron and Melissa Klein, who owned the Sweet Cakes by Melissa bakery in Gresham, Oregon, to compensate the couple for emotional and mental suffering that resulted from the denial of service, The Los Angles Times reported.
The Kleins had cited their Christian beliefs against same-sex marriage in refusing to make the wedding cake for Rachel and Laurel Bowman-Cryer.
Avakian's final order, issued on Thursday, had been expected in the dispute that dates from 2013, one of several around the nation involving bakers, florists and photographers who have refused to provide services to same-sex couples on religious grounds, the report said.
According to the state Bureau of Labor and Industries' report, Rachel Bowman-Cryer and her mother attended a bridal show in Portland where the Kleins had a booth advertising their wedding cakes.
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When Aaron Klein was told there would be two brides, Rachel and Laurel, he said that he was sorry, but the bakery did not do wedding cakes for same-sex couples because of his and his wife's religious convictions, according to the report.
In August 2013, the brides filed a complaint with the state Bureau of Labor and Industries, and the agency brought charges against the Kleins in January 2014.
Aaron Klein said his family had suffered because of the case and the glare of media attention.
In a Facebook post, the Kleins vowed to contest the ruling.
"We will NOT give up this fight, and we will NOT be silenced," they wrote. "We stand for God's truth, God's word and freedom for ALL Americans.