Transgender health issues will no longer be classified as a mental and behavioral disorder by the World Health Organization.
Instead transgender will be listed under a chapter on sexual health.
The World Health Organization (WHO) has been praised by doctors and advocates for removing the stigma around transgender people in its latest changes to the global manual of diagnoses.
A WHO expert says the organization now understands that transgender is 'not actually a mental health condition'.
'It was taken out from mental health disorders because we had a better understanding that this was not actually a mental health condition, and leaving it there was causing stigma,' Dr Lale Say said to the BBC.
'So in order to reduce the stigma, while also ensuring access to necessary health interventions, this was placed in a different chapter,' he added.
According to WHO's latest manual, called the ICD-11, gender incongruence is defined as a marked and persistent incongruence between a person's experienced gender and assigned sex.
In the prior version, ICD-10, being transgender was considered a gender identity disorder under a chapter entitled mental and behavioral disorders.
Human Rights Watch believes the change will be a 'liberating effect worldwide'.
'Governments should swiftly reform national medical systems and laws that require this now officially outdated diagnosis,' Graeme Reid, the lesbian, gay, bisexual, and transgender rights director at Human Rights Watch said.
For the trans community, the new recognition is a victorious milestone.
'It has taken us a long time to get here. Until a few years ago, removing pathologising categories affecting trans and gender diverse people from the ICD-10 list of mental disorders seemed impossible,' nine international organisations working on gender identity said in a joint statement.
'Today, we know that full depathologisation can be achieved and will be achieved in our lifetime,' the statement added.
'Although placement in this chapter is an improvement, it is by no means perfect. For example, it is somewhat reductive to define trans health as related only to sexual health.'
Nations will have until January 2022 to put the changes in place.
Changes to the diagnostic manual were first announced last year and approved at the World Health Assembly last Saturday.