Denmark is to become the first country in the world to remove trasgender from a list of mental illnesses recognised by the country's health authority.

From 1 January, 2017, transgender will no longer be classified as a mental illness, the Ministry of Health announced.

"At the moment, transgender is listed as a mental illness or behavioural problem. That is incredibly stigmatising and in no way reflects how we see transgender people in Denmark. It should be a neutral diagnosis," Social Democrat health spokesman Flemming Møller Mortensen told news agency Ritzau.

It comes after Amnesty International criticised Denmark's treatment of transgender people, claiming in an April report the "humiliating" psychiatric screenings and observations transgender people must undergo to be approved for hormone therapy are "outdated and offensive".

It claimed Denmark's health system lags behind countries including Nepal, Brazil and Argentina in its treatment of transgender people.

Moller said that Danish health authorities were no longer prepared to wait for the result of a World Health Organisation study into whether 'Gender Identity Disorder', the psychiatric term used to refer to transgender people, ought to be listed in the organisation's Classification of Diseases.

"The WHO is currently working on a new system for registering diagnoses. It has been working on it for a very, very long time. Now we've run out of patience, and want to send out a signal saying that if the system is not changed by October, then we in Denmark will go it alone," said Mortensen.

Health Minister Sophie Lohde confirmed to broadcaster DR that if the WHO did not act by autumn, then Copenhagen would seek a "Danish solo act" to change the definition unilaterally.

Denmark has a history of progressive gay and transgender legislation, becoming the first country to legalise same sex unions in 1989, and in 2014 became the first country to allow people a legal change of gender without the need for a statement from a medical expert.