"Anchorage voters rejected fear and intimidation," Fair Anchorage Field Organizer Lillian Lennon said.
"To every person who's ever been singled out, this one's for you," the 33-year-old said.
A judge's sign-off is still needed to make the settlement effective
One Democratic lawmaker compared Texas's bathroom bill to Jim Crow laws.
Historically, the states' rights and religious freedom arguments have been a cover for bigotry.
The eight justices are due to hear oral arguments on March 28 on whether the Gloucester County School Board in Virginia can block Gavin Grimm, a female-born transgender high school student, from using the boys' bathroom.
Reversing the Obama guidelines stands to inflame passions in the latest conflict in America between believers in traditional values and social progressives, and is likely to prompt more of the street protests that followed Trump's Nov. 8 election.
The law known as House Bill 2, which bars transgender people from using government-run restrooms that match their gender identity and limits local nondiscrimination protections, will doom the state's chances, Dupree wrote in a letter.
The states are following the lead of North Carolina, which made international headlines over its House Bill 2.
The state in March became the first to bar transgender people from using public restrooms that match their gender identity.