The children of gay couples will also be baptised, with trans people permitted to serve as godparents and wedding witnesses.
Pope Francis has approved a document from the Congregation for the Doctrine of the Faith, which states that a transgender person 'can be admitted to the role of godparent' for baptism, can serve as a witness at a wedding, and can receive baptism.
The right to receive baptism also extends to children who have been adopted or conceived through surrogacy by people in same-sex couples.
The paper comes in response to queries sent by Monsignor José Negri, Bishop of Santo Amaro in Brazil, and it was signed by Prefect Victor Manuel Fernandéz.
"A transgender person, even if they have undergone hormone treatment and gender reassignment surgery, can receive baptism under the same condition as other faithful," reads the document, with the condition that the situation does not cause "public scandal or confusion among the faithful".
Some conservative believers are furious at the potiff's decision.
English deacon Nick Donnelly, one of Pope Francis's most ardent and outspoken critics, wrote on X (formerly Twitter) that he refuses to "co-operate with this narcissistic insanity", referring to transgender people as "mentally afflicted individuals".
This is not the first time the Pope has declared that all the faithful should be included in the Church. Last August, during a conversation with the Jesuits of Lisbon during his trip to Portugal for the World Youth Day, the Pope declared that the church is open to all.
Francis has several times met with transgender people who have sought refuge in Roman churches in recent years. However, he has also taken a strong stand against what he refers to as "gender theory", and has not altered the basics of church teaching against homosexuality.