WASHINGTON—The U.S. military is preparing to lift its prohibition on transgender service members as early as next week, ushering in a cultural change in the armed forces, a Defense Department spokesman said.

The move comes after the Obama administration lifted measures that prevented women from taking certain combat roles and stopped the “Don’t Ask, Don’t Tell” policy that prohibited gay and lesbian soldiers from serving openly.

Eric Pahon, a spokesman for the Defense Department, said the Pentagon would issue the decision lifting the ban on transgender service members in the coming weeks, possibly as early as next week. A number of details must still be finalized before the decision can go ahead, the official said.

“They have really taken their time to make sure they have come up with a policy that balances the needs of service members and mission readiness,” Mr. Pahon said.