"Transgender servicemembers will no longer be subject to the possibility of discharge or separation on the basis of gender identity," the White House said.
There were 8,980 active duty transgender troops in 2019, according to Department of Defence data analysed by the Palm Center, a non-profit group.
"President Biden believes that gender identity should not be a bar to military service, and that America's strength is found in its diversity," the White House statement added.