Can i be let go from work?

I have worked for the State of Florida at a data center for two years and had very good performance reviews. I disclosed my criminal background when i got the job. I then had to have a background check done 8 months later and to my surprise i was denied a level 2 background clearance. To make it short, i got an exemption to policy, got off probation and am now career service. But last fri. i was told that another agency was coming in and required even more security clearance and the state would try to find me something or i would be let go! Just wanted to know if that was legal? Seems to me that it is not because i didn't get hired by the group coming in. Please let me know thanks,