California Governor Gavin Newsom on Saturday signed a bill which requires large stores to maintain "gender neutral" toy aisles.
The law does not ban separate boys and girls sections but requires that large stores must have also have a separate, gender-neutral section.
Stores that refuse to comply face a $250 fine for their first violation, and $500 for each subsequent violation.
The new law goes into effect in 2024.
It applies only to California retailers with 500 or more employees.
The bill's wording states that the reason behind the law is to help shoppers notice "unjustified differences in similar products" and prevent gender bias in children's toys.