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Top-level US college sport is pulling out of North Carolina over the state's law requiring people to use the bathroom of their birth gender.

Critics say the law discriminates against the LGBT community.

The National Collegiate Athletic Association (NCAA) said on Monday that seven championship games will be relocated in the 2016-2017 season.

Ringo Starr, Bruce Springsteen, and Pearl Jam have also cancelled performances in the state over the law.

Men's college basketball is an important part of North Carolina culture, and experts say the decision will have real economic ramifications for the state.

North Carolina has hosted more men's basketball tournament games than any other state, the NCAA said.

In addition to basketball, the decision also affects football, lacrosse, tennis and baseball, and golf. It does not cover American football.

"NCAA championships and events must promote an inclusive atmosphere for all college athletes, coaches, administrators and fans," the organization said in a statement.

"Current North Carolina state laws make it challenging to guarantee that host communities can help deliver on that commitment."

Proponents of the law known as HB2 say that it prevents sexual assaults from occurring in bathrooms.

The announcement follows the National Basketball Association (NBA) decision to move its 2017 All-Star game away from Charlotte.

In their statement, the NCAA cited laws passed in five states, which prohibit "travel to North Carolina for public employees and representatives of public institutions", which could apply to coaches and student athletes.

Republican Governor Pat McCrory has yet to respond, but a spokeswoman for the state Republican Party called the decision "so absurd it's almost comical".

The US Justice Department has sued North Carolina saying the law constitutes a pattern of discrimination on the basis of gender identity.

Announcing the lawsuit in May, Attorney General Loretta Lynch called attention to the state's history of discrimination against black people.

"It was not so very long ago that states, including North Carolina, had other signs above restrooms, water fountains and other public accommodations keeping people out based on a distinction without a difference," she said.