Transgender personnel will no longer be barred from serving openly in the US military, the Pentagon announced Thursday.
Lifting the ban on transgender service members is "the right thing to do, and it's another step in ensuring that we continue to recruit and retain the most qualified people," Defense Secretary Ashton Carter told reporters.
"Good people are the key to the best military in the world."
The move is the latest in a series of Pentagon personnel reforms under Carter, who has repeatedly stressed the need for the military to modernize to draw from as deep a talent pool as possible.
The new transgender policy will be phased in during a one-year period, but the military can no longer discharge or deny reenlistment to troops based solely on their gender identity, effective immediately.
By July 1 next year, the services will begin allowing transgender personnel to sign up, assuming they have met the necessary physical and mental standards to do so, the Pentagon said.
Under the new policy, the Pentagon will cover medical expenses related to being transgender, including gender reassignment surgeries when these are deemed "medically necessary."