The Swedish Christian Democrat party has abandoned its support for the rule which requires transgender people to be sterilised before the state recognises their gender and so cleared the way for repeal.
77,000 people signed an AllOut.org petition calling on the country to reverse the ban, which the organisation said is the largest-ever online movement to protect trans human rights.
AllOut.org said the announcement should set a precedent for the 28 countries in Europe with similar rules.
The move was being held back by the Christian Democrats, one of four parties in Sweden’s ruling coalition.
A protest was held outside the Swedish embassy in London earlier this month objecting to the governing coalition’s position on the 1972 law.
The Christian Democrats have now reversed their position, writing in the Swedish Press: “It’s time to abolish the requirement for sterilization at sex change.”
Ulrika Westerlund, President of the Swedish Federation for LGBT Rights said: “This is an incredible news for Sweden: it means that anyone will be able to have their true identity recognized without having to be sterilized.
“It’s crucial that the new law comes into place as soon as possible.”
Andre Banks, Executive Director of AllOut.org said: “Swedish activists have worked for years to lay the foundation for this victory and I am so proud that AllOut.org could build the international momentum that finally pushed Prime Minister Reinfeldt and party leaders to end this cruel practice.
“It’s a victory for Sweden, but it is also decisive for Europe. AllOut.org members across the continent will continue to push online and in Parliament until each of these appalling laws are thrown out with the trash.”
According to the Council of Europe, the European countries which currently require sterilisation are: Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Georgia, Greece, Iceland, Italy, Latvia, Malta, Moldova, Montenegro, the Netherlands, Norway, Poland, Romania, San Marino, Serbia, Slovakia, Sweden, Switzerland, Turkey and the Ukraine.
Others, including the UK, do not impose this obligation on trans people.