It states that students can only join sports teams that align with their sex assigned at birth.
Critics say the policy discriminated against transgender athletes, but those who oppose the change say the policy protected girls in sports.
Policy 123.3 was only in place for two weeks before the new school board suspended it late last year. On Tuesday night, they took the first step to get rid of the policy for good.
Rescinding Policy 123.3 is part of the change promised by the new Democratic majority at the Central Bucks School Board.
"We're taking our time to make these changes," said school board president Karen Smith (D) speaking to Action News about retiring several controversial policies enacted by the previous conservative board.
Policy 123.3 was passed after those board members lost their election but before they handed over the reins to the new board.
"It essentially discriminated against transgender athletes," said Smith.
Several residents, though, spoke out against rescinding the policy.
"I'm merely a parent trying to protect my daughter," said Mike Sobczak of Plumstead Township.
"This policy is designed to uphold Title IX and to protect our girls in sports," said resident Vonna DeArmond. "Why would you want to retire it?"
"The purpose of Title IX is to provide equal opportunity of all students," said Smith to Action News.
The board voted 8-to-1 to move forward with dropping the policy with the lone dissenting vote coming from Republican board member Jim Pepper.
The Democratic majority has already dropped several other controversial policies enacted by the previous board. They got rid of one policy that banned teachers from displaying Pride flags and another that critics say amounted to a book ban.
"Some of the science classes or art classes we had to send home permission slips because the books had nudity in them," said Smith.
As for Policy 123.3, the district is returning to operating under Pennsylvania Interscholastic Athletic Association guidelines.
"Those guidelines give discretion to the school principal," said Smith.
She says the changes they're making are already of interest to people in other parts of the state and the country.
"We fixed things here in Central Bucks," she said, "but I get phone calls from people in other districts across Pennsylvania down to Florida because now they're in the same situation we're in."
Smith says her goal is for the school board to return to the days of being more moderate. The final vote on rescinding the sports team policy will happen in about a month.