A British-born Sikh couple claim they were told they could not adopt a child because only white children were available.
Sandeep and Reena Mander, from Berkshire, said that despite insisting they were happy to adopt a child of any ethnic background, they were told white British or European applicants would get preference.
The married couple, who are of Sikh Indian heritage but were born in the UK, were told to adopt a child from India instead, even though they have no close ties with the country, the Times reported.
Their local MP, prime minister Theresa May, will help the couple take the case to court to argue they have been discriminated against and they have the support of the Equality and Human Rights Commission (EHRC).
Georgina Calvert-Lee of the law firm McAllister Olivarius, representing the Manders, told the Times: "It is unacceptable for a child to be denied loving adoptive parents solely on the grounds that the child does not share the same racial or cultural heritage as the adopters."
The couple had tried to conceive for seven years and after repeated failed IVF attempts, decided to adopt. They were assessed by the Adopt Berkshire agency and deemed as suitable parents.
"What we didn't expect was a refusal for us to even apply for adoption, not because of our incapability to adopt, but because our cultural heritage was defined as 'Indian/Pakistani,'" Sandeep Mander said.
Government guidelines say a child's ethnicity should not stop adoption, although children from the same ethnic background as the prospective parents can be prioritised.
David Isaac, chairman of the EHRC, said: "There are many children who are waiting for a loving family like Sandeep and Reena to help give them a better life. To be denied this because of so-called cultural heritage is wrong."
Although Adopt Berkshire has not commented, its website states applicants can come from different cultural, religious and sexual backgrounds.