US Secretary of Defense Jim Mattis said transgender service members can remain in the military for now, despite President Donald Trump's memo to the Pentagon last week banning new transgender recruits.
Mattis, in a statement Tuesday, said transgender soldiers can serve in uniform while an expert panel works to provide recommendations on the matter.
The Department of Defense faces a February deadline to submit a plan on how to implement the changes.
Trump's memo issued Friday also blocks new gender-re-assignment surgeries for the military.
The American Civil Liberties Union sued the president in federal court on Monday, saying the ban violates the US Constitution's guarantee of equal protection and due process.
The White House directive created uncertainty for thousands of transgender service members, many of whom came out after the Pentagon said in 2016 it would allow transgender people to serve openly.