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AUSTIN (CBSDFW.COM) – There’s speculation a Texas school district may sue the Obama Administration over its directive to all schools about transgenders students and bathrooms.

While the Texas Attorney General’s office wouldn’t comment Tuesday night, CBS11 has learned Ken Paxton will announce what he describes as a major lawsuit in Austin Wednesday afternoon.

Any Texas school district that files suit would ask the Attorney General’s office to represent them.

The feds say school districts must allow transgender students to use whichever bathroom they identify with, even if it’s different than their birth gender.

Some school district says they worry if they don’t comply, they’ll lose federal funding.

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