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Tasmania has become Australia's first state to make it legally optional to list gender on birth certificates.

The landmark bill was approved in the state's lower house on Wednesday, meaning it will become law. It had already been passed in the upper house.

The bill also removes a condition that had required transgender people to have surgery before their gender was recognised.

The state government fiercely opposed the bill in its current form.

However, opposition political parties combined to secure enough votes to pass the legislation after a lengthy debate.

"This is indeed a historic occasion," said House of Assembly Speaker Sue Hickey, who voted for the legislation.

"This is not a win for any particular political party, but rather the dignity of the transgender community."

The legislation allows people aged 16 or older to apply to change their listed gender without the approval of their parents.

The state government said recent amendments to the bill had not been properly considered, describing the legislation as a "dog's breakfast".