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"It is our understanding that event organizers plan to have a portion of the parade dedicated to military members," Deputy Assistant Secretary of Defense for Community and Public Outreach Rene Bardorf wrote in an internal memo.

"We further understand organizers are encouraging service members to seek their commander's approval to march in uniform and to display their pride," Bardorf wrote.

Citing national media attention to the issue, Bardorf granted approval for service members to participate, but limited that approval in scope to the 2012 San Diego Pride Parade.

San Diego has a large military presence due to its naval base and the nearby Marine Corps Base Camp Pendleton.

Nearly 400 military members have already signed up to march in the parade, according to organizer San Diego LGBT Pride.

Many more are expected to participate in the military parade after the announcement went public, Fernando Lopez, the director of public affairs for San Diego LGBT Pride, told Reuters.

More than 50,000 people are expected to attend the weekend festivities overall, organizers said.

"We are hopeful that those who have feared coming to share in the joy of Pride out of concern for losing their military careers will be able to finally celebrate their full and complete selves," San Diego LGBT Pride said in a statement.

In the past, only armed services veterans, not those on active duty, were allowed to wear their uniforms at gay pride parades. Commanders could give permission to individuals to take part in such events in uniform but no blanket permission had previously been issued, Lopez said.

In a second internal memo published on Thursday, Bardorf said that for parades other than the San Diego event for which he issued a specific memo, local commanders are given discretion in allowing service members to participate unless it is "likely to garner national or international interest or news coverage."

The approval for active service members of the Army, Marine Corps, Navy and Air Force to participate in the gay pride parade in uniform is the latest of a string of milestones following the repeal of "Don't Ask, Don't Tell."

The U.S. military celebrated gay pride month at the Pentagon for the first time last month, an event that other federal agencies like the CIA had been celebrating for years.

Also in June, active-duty Air Force Technical Sergeant Erwynn Umali married his civilian partner Will Behrens on the McGuire-Dix-Lakehurst joint military base in New Jersey. The wedding, first reported by Slate magazine this week, was the first same sex marriage on an American military base.

Under the "Don't Ask, Don't Tell" policy, more than 14,500 U.S. service members were thrown out of the military since the rule went into effect in 1993, according to the Servicemembers Legal Defense Network.

Many senior members of the military had publicly warned against repealing the ban in wartime, saying it could hurt cohesion of troops or undermine morale. The Pentagon said in May that there had been no such impact.

The end of the policy has come at a time of steadily increasing public support for same-sex marriage. The Gallup polling organization said in a recent survey that half of American adults are now in favor of gay marriage.

For the first time in U.S history, The Defense Department announced it is allowing service members to march in their uniform at San Diego's gay pride parade.In a memorandum sent to all its branches, the department said it was making the allowance for San Diego's gay pride parade on Saturday even though its policy generally bars troops from marching in uniform in parades.