It is the first state bill of its kind in the US this year, though 10 other states have similar legislation in process.
“I never imagined dealing with this, but POTUS left us no choice. One of his first acts was to sign an EO encouraging transgenderism in children,” Tate Reeves tweeted.
“So today, I proudly signed the Mississippi Fairness Act to ensure young girls are not forced to compete against biological males.”
The bill will become law on 1 July, although a legal challenge is expected.
A similar law is expected to be signed this week in South Dakota by Governor Kristi Noem. The state Senate passed the bill on Monday which restricts transgender women athletes from competing on high school and college girls and women’s teams.
A federal court blocked legislation in Idaho last year.
More than 20 states are proposing restrictions either on athletics or gender-confirming health care for transgender minors this year.
Conservative lawmakers claim to be motivated by the executive order signed by Democratic President Joe Biden on 20 January that bans discrimination based on gender identity in school sports and elsewhere.
Alphonso David, president of Human Rights Campaign, the LGBT+ civil rights organisation, said in a statement on Thursday that the Mississippi law could lead to more bullying of transgender people.
“This law is a solution in search of a problem, and legislators in Mississippi have not provided any examples of Mississippi transgender athletes gaming the system for a competitive advantage because none exist,” Mr David said.
Republican legislators in support of the bill provided no evidence of any transgender athletes competing in Mississippi schools or universities.
Chase Strangio, a transgender-rights attorney with the national American Civil Liberties Union, described the Mississippi bill as “very vague and seemingly unenforceable”.
“Unfortunately, there is already rampant discrimination against trans youth in Mississippi, which means people are already driven out of sport,” Mr Strangio added.
Supporters of state legislation argue that transgender girls, because they were born male, are naturally stronger, faster, and bigger than those born female.
Opponents of the bills say such proposals violate not only Title IX of federal education law prohibiting sex discrimination, but also rulings by the US Supreme Court and 11th US Circuit Court of Appeals.