(CNN) -- Alabama's governor has signed what he billed as tough illegal immigration legislation, requiring police to check the status of anyone they suspect may be in the country illegally when stopped for another reason.
The bill, due to take effect on September 1, was signed into law by Republican Gov. Robert Bentley on Thursday.
Its passage makes Alabama the latest in a series of states, including Georgia and Arizona, to enact controversial new laws aimed at tackling illegal immigration.
Civil rights groups and the Mexican government have been quick to condemn the move.
According to a fact sheet presented by Alabama House Republicans, the bill will require law enforcement officers "to attempt to determine the immigration status of a person who they suspect is an unauthorized alien of this country".
The legislation also makes it a criminal offense to provide transport or housing to an illegal immigrant. The state will have to check the citizenship of students, and any business that knowingly employs an illegal immigrant will be penalized.
A spokesman for Bentley told CNN that the governor had signed "a tough illegal immigration law."
Republican state Rep. John Merrill told CNN he had no hesitation in backing the legislation, saying it is "good for Alabama" because it will reduce illegal immigration to the state.
He rejected suggestions the law is discriminatory, and said he is confident it was drafted in such a way that it will survive legal challenges.
The legislation is intended to "provide equal opportunities for all people who want to come to Alabama legally," he added.
But critics say it has far-reaching consequences and will have a particular impact on young people because it requires the state to check the citizenship of all those seeking to enroll in schools.
Mary Bauer, legal director of the Southern Poverty Law Center, a civil rights group, condemned what she called a very radical law, telling CNN it is "mean-spirited, racist, unconstitutional, and it is going to be costly."
She said not just illegal immigrants but also many American citizens could be impacted by the new rules.
"It makes it a crime for U.S. citizens to give people a ride if they turn out to be undocumented. It doesn't even have an exception for churches that are providing shelter or food or rides," she said.
Earlier the SPLC issued a statement saying the state stood to lose "millions more in lost tax revenue from Alabama businesses that will bear the brunt of boycotts of Alabama goods and services and lost sales to documented and undocumented immigrants who flee the state rather than deal with racial profiling and the state's anti-immigrant climate."
The Mexican government warned that the law could affect the human and civil rights of Mexicans living in or visiting the state.
Several immigrant and civil rights organizations filed a class-action lawsuit last week against a new Georgia law aimed at cracking down on illegal immigration.
That law allows police to ask about immigration status when questioning suspects in certain criminal investigations.
Meanwhile, Arizona's governor said last month she would appeal to the U.S. Supreme Court after portions of the state's new immigration law were blocked by federal courts.
The Arizona bill catapulted the issue onto the national stage last year, drawing a lawsuit from the U.S. Department of Justice, which argues that the law is unconstitutional.
Lawmakers in at least 20 states weighed similar proposals during the past year, according to the National Immigration Forum.