The governor calls it a threat to public safety, and some state lawmakers are vowing to overrule the city.
The Charlotte City Council voted 7-4 yesterday to add sexual orientation, gender identity and marital status as attributes protected from discrimination when it comes to public accommodations including restaurants, retail stores and other businesses.
Public schools would not be affected by the law, which would take effect April 1.
"I'm pleased that Charlotte has sent a signal that we will treat people with dignity and respect, even when we disagree," Charlotte Mayor Jennifer Roberts said moments after the vote.
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One key legislative leader signaled today that he is prepared to intervene.
House Speaker Tim Moore said in a statement he would join fellow Republican Gov. Pat McCrory and conservative colleagues "in exploring legislative intervention to correct this radical course."
The legislature's next scheduled session begins in late April.
McCrory - a former mayor of Charlotte, one of the 20 largest cities in the US - said changing restroom rules could "create major public safety issues."
Since a similar anti-discrimination ordinance approved by Houston's city council was overturned in a voter referendum last year after opponents raised fears about bathroom safety, this line of attack has been used repeatedly around the country.
In South Dakota, where the legislature passed a bill requiring students to use bathrooms corresponding to their sex at birth, transgender activists were trying to persuade the governor not to sign it.
The statement from executive director Chris Sgro accuses the governor and legislators of trying "to bully the Charlotte City Council with threats to strip municipalities of their rights to govern.