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Joe Biden indicated he would move to allow more transgender students take part in school sports in an executive order banning discrimination on the basis of gender identity.
Under the presidential order, federal agencies must apply existing laws banning discrimination on the basis of race, religion and sex to encompass discrimination on the basis of sexual orientation and gender identity.
The order states that the policy will also apply to a civil rights law banning discrimination in school or education programmes that receive federal funding, paving the way for transgender students to access sports teams, bathrooms and changing rooms that correspond to their gender identity.
"Children should be able to learn without worrying about whether they will be denied access to the restroom, the locker room, or school sports," Mr Biden said in the order.
The order will apply to areas overseen by federal agencies, such as education, housing and healthcare.
President Biden just issued an executive order protecting Americans against discrimination on the basis of sexual orientation and gender identity — a turning point in our fight for equality under the law. https://t.co/fSuxT8dF8w
— Human Rights Campaign (@HRC) January 21, 2021
It follows the Democrats' campaign commitment to restore protections for transgender people which were swept away during the Trump administration.
Mr Biden's department of education is also expected to switch sides in two upcoming legal battles which could be pivotal in determining whether transgender athletes are treated by the sex on their birth certificates or by how they identify.
The White House's contact page has also been updated to allow the public to select gender-neutral pronouns when contacting the US government.
People who identify as non-binary - neither male nor female - can now select the gender-neutral title "Mx" on the website's contact page, which also added a drop-down list of personal pronouns, including "they/them".
Some were quick to decry the executive order online, with the non-profit Alliance Defending Freedom claiming the order forces "vulnerable girls to share intimate spaces with men who identify as female".
Others however celebrated the move and pointed out that the details of the policy are yet to be laid out.
"There's plenty of reason for people who support trans rights to be happy... but the specifics of Biden admin policies around (for instance) educational policy in this area haven't been written yet," tweeted Angus Johnston, a New York-based historian and founder of a student activism website.
The basis for the executive order is a landmark Supreme Court ruling last year, which found that the 1964 Civil Rights Act also protected gay, lesbian, and transgender workers from discrimination based on sex.
While the Supreme Court ruling applied to an employment case before the court, Mr Biden's executive order expands the provisions to all parts of the federal government.
Federal agencies must review their policies, and if necessary, adopt new plans to carry out the executive order within 100 days.