(CNN)European football governing body UEFA has declined a request to light up Munich's Allianz Arena in rainbow colors for Wednesday's Euro 2020 match between Germany and Hungary.
The request was made following a proposal from the Munich city council in the wake of an anti-LGBTQ law passed by Hungary's parliament last week.
The legislation, which has been widely criticized by human rights groups and opposition parties, bans the dissemination of content in schools deemed to promote homosexuality and gender change.
"Racism, homophobia, sexism, and all forms of discrimination are a stain on our societies -- and represent one of the biggest problems faced by the game today," UEFA said in a statement on Tuesday.
"Discriminatory behavior has marred both matches themselves and, outside the stadiums, the online discourse around the sport we love.
"However UEFA, through its statutes, is a politically and religiously neutral organization. Given the political context of this specific request -- a message aiming at a decision taken by the Hungarian national parliament -- UEFA must decline this request."
UEFA added that it has proposed for Munich to light up the stadium either on June 28, which marks Christopher Street Liberation Day, or between July 3 and July 9, which is Christopher Street Day week in Munich.
Christopher Street Liberation Day recognizes the 1969 Stonewall riots and the march in New York City that took place a year later -- now considered the first gay pride parade.
In a cross-party proposal submitted by Munich city council, the idea to illuminate the Allianz Arena in rainbow lights was to "give an important and visible sign of solidarity towards the LGBTI Community in Hungary, those who suffer under the current tightened homophobic and transphobic Hungarian government legislation."
According to Hungarian news agency MTI, Péter Szijjártó, the country's minister of Foreign Affairs and Trade, welcomed UEFA's decision and said that "common sense prevailed among European football executives."
But Munich mayor Dieter Reiter said it is "shameful that UEFA forbids us to set a sign for cosmopolitanism, tolerance, respect and solidarity with the LGBTQI+ community here in Munich."
The city of Munich is planning to light up its town hall and several other landmarks in rainbow colors to protest the decision, while football clubs in Germany, including Cologne and Hertha Berlin, have said they will illuminate their stadiums in rainbow colors during Wednesday's game.
Herbert Hainer, president of Bayern Munich, which plays its home games at the Allianz Arena, said the club "would have liked it if the Allianz Arena could have been lit up in rainbow colors" in a statement on social media.
He added: "Open-mindedness and tolerance are fundamental values that our society and FC Bayern stand for.
"That's why FC Bayern has lit up its stadium in the colors of diversity, for example on Christopher Street Day, for several years."
Wednesday games will be both sides' last of the Euro 2020 groups stages.
Germany lost its opening game against France but beat Portugal 4-2 at the weekend, while Hungary lost to Portugal in its opening game before drawing 1-1 with France.