Washington: The Pentagon next month will announce the repeal of a policy banning transgender people from serving openly in the military, Defence Department officials said on Friday, moving to end what has widely been seen as one of the last barriers to service.

Defence Secretary Ash Carter has called the regulation outdated and harmful to the military. A year ago, he directed officials from all the military branches to determine what changes would be needed to lift the ban, in a tacit recognition that thousands of transgender people were already in uniform.

Under the Pentagon’s plan, first reported by USA Today, each branch will put in place new policies covering recruiting, housing and uniforms for transgender troops.

Military officials have been “making great progress, holding multiple meetings and working hard to come up with a policy that balances the needs of soldiers with mission readiness,” said Eric Pahon, a Defence Department spokesman. “They’re trying to come up with something that fits the needs of all of the different services.”

Ashley Broadway-Mack, president of the American Military Partner Association, a support network for partners and spouses of LGBT troops and veterans, said in a statement that “our transgender service members and their families are breathing a huge sigh of relief.”

Estimates of the number of transgender people in the 1.2 million-member military range from 2,000 to more than 15,000. As with the “don’t ask, don’t tell” policy that applied to gay men, lesbians and bisexuals until it was lifted in 2011, current rules have done little to keep transgender people out of the military. Instead, they have forced many to lie about their status and keep it a secret.

Since taking the defence secretary post in February 2015, Carter has set about dismantling discriminatory rules in the services, including opening all combat positions to women.

This week, Eric K. Fanning formally took over as Army secretary, becoming the first openly gay leader of a military service branch.

A study commissioned by Carter and completed in March found that letting transgender members openly serve would cost little and would have no significant impact on unit readiness. The study, by the RAND Corp., estimated that 2,450 active-duty members of the military were transgender, and that every year about 65 service members would seek to make a gender transition.

The study said that if the Pentagon did not cover medical procedures like hormone therapy and surgery, service members would most likely not seek medical care and have higher rates of substance abuse and suicide.

The procedures would cost the Pentagon $2.9 million (Dh10.65 million) to $4.2 million a year, the report said. Each year, the military spends $6 billion of its $610 billion budget on medical costs for active-duty service members.