President Joe Biden has promised to overturn a Pentagon policy limiting the service of transgender individuals.
The report is backed by former military surgeons general.
Two senators have offered an amendment aimed at lifting the military's ban on transgender service.
Until Monday's ruling, it was legal in more than half the states to fire workers for being gay, bisexual or transgender.
The suit had been filed against Defense Secretary Mark Esper, challenging the military's current transgender policy.
The officer will have her gender officially changed in the Defense Enrollment Eligibility Reporting System.
The legislation still needs to be reconciled with the Senate's version of the national defense bill.
Army Gen. Mark Milley said that readiness has not been compromised by transgender individuals serving in the military.
The administration's policy prohibiting most transgender individuals from entering the military went into effect on Friday.
The Navy released guidance noting that sailors will be permitted to "live socially" in their preferred gender if not on duty.
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Some 2,200 active-duty women out of roughly 40,000 are serving in infantry, cavalry, armor and field artillery roles.
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Four months prior to the invasion of Iraq, I found out that the George W. Bush administration was selling the war to the...