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Fairfax County Public Schools is preparing legal action against the U.S. Department of Education after the agency moved to restrict access to as much as $167 million in federal funding during a dispute over bathroom and locker room policies.

The department’s Office for Civil Rights alleges that FCPS rules permitting access based on gender identity violate Title IX. FCPS argues that its policies comply with controlling state and federal law.

Earlier in August, the school division sent federal officials a letter explaining its position and asking them to stop further action until the courts clarify the legal issue. Superintendent Dr. Michelle Reid said the department instead attempted to designate FCPS a “high-risk” entity, effectively freezing the federal money.

FCPS contacted the department again during the week of Aug. 25. The division said it faced an impossible choice between violating a federal court ruling concerning support for transgender students and risking critical funding. According to Reid, federal officials did not respond.

At its regular meeting that week, the local education board unanimously authorized a lawsuit against the department.

Board members said the legal challenge aims to protect the health and safety of all students while keeping essential services intact. They also reaffirmed the division’s commitment to transgender and gender-expansive students.

“We will not abide attempts to pit one group of students against another,” the board said.

The disputed funding supports food and nutrition programs, multilingual education, special education, services for students from low-income families, teacher development and initiatives designed to improve student achievement. FCPS said tens of thousands of students could be harmed if access to the money remains restricted.