Transgender school students will be able to use their preferred names, wear the uniform and use the toilets of their choice under a new Education Department policy.

They will also be able to sleep alongside students of the gender they identify with on school camps.

The department says the policy will ensure "consistent" treatment of transgender pupils by school leaders.

"The difference is that this clearly articulates what we require from schools," executive director of statewide services and child development Ann-Marie Hayes told The Advertiser.

"We had a number of queries from schools and parents, and we needed to make it very clear what our legislative requirements were and how schools enact them - supporting principals in particular but also families in what they can expect from schools."

Hayes also defended the policy and said it could not be taken advantage of and that a boy could not pretend to be transgender in order to sleep in the same area as girls on a school camp.

Hayes also felt that the policy is one of tolerance and would send an important message to other students that transgender children are not to be bullied.