An inquiry commissioned into the matter concluded the organization that runs the schools is opposed to gay-straight alliances and had no intention of complying.
A lawyer with a group representing two Alberta private schools says they're following the law on gay-straight alliances.
Education Minister David Eggen on Thursday ordered Harvest Baptist Academy and Meadows Baptist Academy to allow students to establish the peer support groups.
Eggen's order also instructs the society running the Edmonton-area schools to ensure a staff member be designated to act as a liaison to any such groups.
The schools were first informed in November 2015 of their responsibility to comply with the relevant section of the School Act and were asked to submit their policies by last March.
"The schools are in compliance with the legislation," John Carpay, president of the Justice Centre for Constitutional Freedoms, said Friday.
But the government says the Independent Baptist Christian Education Society, which runs the two schools, put in place an anti-bullying policy that does not specifically address gay-straight alliances.
The society sent the government a letter saying such alliances are incompatible with the mission and Christian beliefs of the schools.
Carpay said other faith-based schools have developed policies similar to those of the Baptist academies.
"The position of the schools is that any student club, any student organization, has to respect the school's mission and beliefs and values," said Carpay.
"And that's a fundamental constitutional principle — that parents have the right to choose the kind of education that shall be given to their children and governments have to respect the rights of parents."
The government commissioned an inquiry last September into the matter. Edmonton lawyer Dan Scott concluded the society was opposed to gay-straight alliances and had no intention of complying.
"The resulting report noted that no student has yet requested a GSA to trigger obligations under Section 16.1 (of the School Act)," said the ministerial order. "But (it) concluded that the position of the society and its chairman on GSAs will have a significant chilling effect on any student who might want to make a request for a GSA in the future."
GSAs are student-organized peer support groups that are meant to help reduce marginalization of LGBTQ youth. Students who wish to form GSAs have the right to do so under Alberta law.
Last year, Pastor Brian Coldwell, who chairs the Independent Baptist Christian Education Society, announced his group would not allow the peer support groups. He said they run counter to the teachings of the society's faith.
Together, the two Baptist schools have about 200 students.
About 70 per cent of public funding for Coldwell's society comes from the province.
Eggen sent out a tweet Thursday night reaffirming his government's support for LGBTQ students.
"All Alberta students are welcome to establish gay-straight alliances in their schools and we support them," he said.