The new order, which Biden signed in the Oval Office during a meeting with Defense Secretary Lloyd Austin, overturns a ban ordered by President Donald Trump in a tweet during his first year in office. It immediately prohibits any service member from being forced out of the military on the basis of gender identity.

Biden's order says that gender identity should not be a bar to military service.

“America is stronger, at home and around the world, when it is inclusive. The military is no exception," the order says. "Allowing all qualified Americans to serve their country in uniform is better for the military and better for the country because an inclusive force is a more effective force. Simply put, it’s the right thing to do and is in our national interest.”

The order directs the departments of Defense and Homeland Security to take steps to implement the order for the military and the Coast Guard. And it says they must reexamine the records of service members who were discharged or denied reenlistment due to gender identity issues under the previous policy.

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It requires the departments to submit a report to the president on their progress within 60 days.

Biden had been widely expected to quickly overturn the Trump policy. And the move also was backed by Biden's newly confirmed defense secretary, retired Army Gen. Lloyd Austin, who spoke of the need to overturn it during his Senate confirmation hearing last week.

“I support the president’s plan or plan to overturn the ban,” Austin said. “If you’re fit and you’re qualified to serve and you can maintain the standards, you should be allowed to serve.”

Under Biden's new policy, transgender servicemembers won't be discharged based on gender identity, and they can serve in their preferred gender once their transition is complete and recorded in the defense reporting system.

The decision comes as Biden plans to turn his attention to equity issues that he believes continue to shadow nearly all aspects of American life. Ahead of his inauguration, Biden's transition team circulated a memo from Ron Klain, now the White House chief of staff, that sketched out Biden's plan to use his first full week as president “to advance equity and support communities of color and other underserved communities."

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The move to overturn the transgender ban is also the latest example of Biden using executive authority in his first days as president to dismantle Trump's legacy. His early actions include orders to overturn a Trump administration ban on travelers from several predominantly Muslim countries, stop construction of the wall at the U.S.-Mexico border, and launch an initiative to advance racial equity.

Until a few years ago service members could be discharged from the military for being transgender, but that changed during the Obama administration. In 2016, Defense Secretary Ash Carter announced that transgender people already serving in the military would be allowed to serve openly. And the military set July 1, 2017, as the date when transgender individuals would be allowed to enlist.

After Trump took office, however, his administration delayed the enlistment date and called for additional study to determine if allowing transgender individuals to serve would affect military readiness or effectiveness.

A few weeks later, Trump caught military leaders by surprise, tweeting that the government wouldn't accept or allow transgender individuals to serve “in any capacity” in the military. “Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender in the military would entail,” he wrote.

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After a lengthy and complicated legal battle and additional reviews, the Defense Department in April 2019 approved the new policy that fell short of an all-out ban but barred transgender troops and military recruits from transitioning to another sex and required most individuals to serve in their birth gender.

Under that policy, currently serving transgender troops and anyone who had signed an enlistment contract before the effective date could continue with plans for hormone treatments and gender transition if they had been diagnosed with gender dysphoria.

But after that date, no one with gender dysphoria who was taking hormones or has transitioned to another gender was allowed to enlist. Troops that were already serving and were diagnosed with gender dysphoria were required to serve in their birth gender and were barred from taking hormones or getting transition surgery.

As of 2019, an estimated 14,700 troops on active duty and in the Reserves identify as transgender, but not all seek treatment. Since July 2016, more than 1,500 service members were diagnosed with gender dysphoria; as of Feb. 1, 2019, there were 1,071 currently serving. According to the Pentagon, the department spent about $8 million on transgender care between 2016 and 2019. The military’s annual health care budget tops $50 billion.

All four service chiefs told Congress in 2018 that they had seen no discipline, morale or unit readiness problems with transgender troops serving openly in the military. But they also acknowledged that some commanders were spending a lot of time with transgender individuals who were working through medical requirements and other transition issues.