Being transgender is no longer being treated as a disorder by the World Health Organisation after the body reclassified it.
Transgender will now be listed under sexual health.
A World Health Organisation expert told the BBC it now understands 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 told the BBC.
"So in order to reduce the stigma, while also ensuring access to necessary health interventions, this was placed in a different chapter."
Human rights groups have welcomed the move as liberating for the transgender community.
"Governments should swiftly reform national medical systems and laws that require this now officially outdated diagnosis," Graeme Reid, the lesbian, gay, bisexual, and transgender rights director at Human Rights Watch said.
A statement issued jointly by nine international organisations working with gender identity said the recognition was a 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," the statement said.