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The act that divided the South into five military districts was the "Reconstruction Act," since this was intended to monitor the South and make sure there was a transition into a new non-slavery-based economy. 

The act that divided the South into five military districts was the Reconstruction Act enacted on March, 1867 (OPTION 2).

This Reconstruction Act was one of the four Acts the Congress passed from 1867 to 1868, following the American Civil War (1861–65), that outlined the conditions under which the Southern states would re-enter the Union, excluding Tennessee since it had already ratified the Fourteenth Amendment and was re-admitted to the Union.

The first act divided the ten Southern states (South Carolina, Mississippi, Florida, Alabama, Georgia, Louisiana, Texas, Virginia, Arkansas, and North Carolina) into five military districts, that would be ruled by a Union general until: (1) they approved the 14th Amendment, which ensured citizenship and equal rights for African Americans, (2) they drafted new states constitutions (3) people voted on them (which include African American and white men alike) (4) and these laws were approved by Congress.