Tasmania has become the first state or territory in Australia to make the inclusion of gender optional on birth certificates.

In reforms hailed by transgender activists, the bill passed parliament on Wednesday afternoon despite the opposition of the Liberal state government.

The laws remove the requirement for transgender people to have sexual reassignment surgery in order to have a new gender recognised.

Those aged 16 years or older can apply to change their registered gender without parental approval.

AAP

"This is a historic day for transgender and gender diverse people," Tasmanian transgender activist Martine Delaney said.

"I feel prouder to be a Tasmanian than I have ever felt before."

The legislation, first put forward by Labor and the Greens last year, passed the lower house on the casting vote of Liberal Speaker Sue Hickey, who crossed the floor.

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"This is not a win for any political party, rather it grants dignity to the transgender community," Ms Hickey said.

The government has maintained their opposition to the reforms, claiming they were poorly drafted and will have unintended consequences.

The bill was heavily amended in the upper house.

Premier Will Hodgman said there hasn't been a full review of the legislation and how it affects other statutes.

"It is highly likely the parliament will need to fix up problems with the legislation and repeal the Labor-Green amendments at a later date," he said in a statement.

The Australian Christian Lobby is backing a repeal of the reforms, having previously said the removal of gender on birth certificates was ignoring biological truths.

"Amending a legal document in this way would have many unintended consequences, like jeopardising women only safe-spaces and encouraging potentially dangerous competitive inequalities in sport,” Australian Christian Lobby state director Mark Brown had said in a statement.

Labor and the Greens maintain that changes to the Marriage Amendment Bill are simple and won't impact the vast majority of the population.

"Just as it was with the vote on marriage equality, the sky is likely to remain in place with the passing of this legislation," state Greens Leader Cassy O'Connor said.

Prime Minister Scott Morrison last year labelled the push to remove gender from birth certificates "ridiculous".