A transgender military officer who has been named the Queensland Australian of the Year for 2016 says the award shows the huge shift in society's attitude to diversity.

RAAF Group Captain Catherine McGregor has become a transgender advocate since publicly announcing she was changing her gender from male in 2012.

Catherine McGregor has been named Queensland's Australian of the Year. Credit:Elesa Kurtz

Her candour in speaking out about her transition has been credited with boosting understanding and acceptance of the transgender community in Australia.

"The Queensland I was born into could not have accepted me as the trans woman I am," the 59-year-old told AAP.