Transgender health issues will no longer be classified as mental and behavioural disorders under big changes to the World Health Organization's global manual of diagnoses.
The newly-approved version instead places issues of gender incongruence under a chapter on sexual health.
A World Health Organization expert said it now understands transgender is "not actually a mental health condition".
Human Rights Watch says the change will have a "liberating effect worldwide".
In the 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 previous version - ICD-10 - this was considered a gender identity disorder, in the chapter entitled mental and behavioural disorders.
Dr Lale Say, a reproductive health expert at the World Health Organization, said: "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.
"So in order to reduce the stigma, while also ensuring access to necessary health interventions, this was placed in a different chapter."
Commenting on the revisions, Graeme Reid, lesbian, gay, bisexual, and transgender rights director at campaign group Human Rights Watch, said the changes would have a "liberating effect on transgender people worldwide".
He added: "Governments should swiftly reform national medical systems and laws that require this now officially outdated diagnosis."
Meanwhile, nine organisations working on gender identity said in a joint statement: "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.
"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.''
© 2017 - All Rights with The Financial Express