Arkansas' Gov. Asa Hutchinson vetoed a bill that would have prevented gender-confirming care for transgender youth in the state.
During a news conference, the Republican governor said the state Legislature's Save Adolescents from Experimentation Act was "well-intended but off course."
Last week, the state's Republican-majority Senate approved the act by 28 to 7, making it the first bill in the U.S. to ban health care access and treatment for trans teenagers.
The Arkansas General Assembly can vote to overturn Hutchinson's veto.
If passed, the bill would have prohibited young trans people from receiving gender-affirming health services and insurance coverage, and it would have forbidden trans minors from receiving gender-confirming hormone therapy or surgery. It would have made it a felony for health care practitioners to conduct gender transition operations on persons under the age of 18.
The bill was criticized by LGBTQ unions, civil rights activists, and leading health care organizations.
"This is a government overreach," he said at the news conference. "You are starting to let lawmakers interfere with health care and set a standard for legislation overriding health care. The state should not presume to jump into every ethical health decision."
Hutchinson's veto comes as a surprise given that he signed another bill March 25, prohibiting trans girls and women from participating in school sports that correspond to their gender identity.
Hutchinson has recently signed a law that allows physicians to deny care based on religious or moral objections. Opponents of the law fear it would be used to deny LGBTQ patients care.
There are currently over 170 anti-LGBTQ bills in state legislatures, with many focusing on trans youth's access to sports and medical care. Tennessee and Mississippi have already passed laws banning transgender girls from engaging in youth sports, and South Dakota Gov. Kristi Noem has signed executive orders to do the same after the state Legislature failed to pass a bill prohibiting transgender girls from participating in youth sports.