The state stands to lose $14 million if 500-plus "I Love New York" signs aren't removed from the state's highways by the end of next month.
The Federal Highway Administration says the signs are illegal because they contain too much information, none of which is important to a driver. FHA officials say this information could distract drivers, so the signs are hazardous.
For years the state government argued the signs were safe.
The FHA says it will withhold $14 million from New York unless the signs come down by September 30th.
It cost about $8 million to install the signs, which Gov. Cuomo's administration has said have helped the state's tourism industry.