Facebook said the changes, shared with The Associated Press before the launch on Thursday, initially cover the company's 159 million monthly users in the US and are aimed at giving people more choices in how they describe themselves, such as androgynous, bi-gender, intersex, gender fluid or transsexual.
Facebook plans to take it global after working with activists abroad to come up with terms appropriate in other countries.
"There's going to be a lot of people for whom this is going to mean nothing, but for the few it does impact, it means the world," said Facebook software engineer Brielle Harrison, who worked on the project and is undergoing gender transformation from male to female. She said she was changing her Facebook identity from Female to TransWoman.
"All too often transgender people like myself and other gender-nonconforming people are given this binary option, do you want to be male or female? What is your gender? And it's kind of disheartening because none of those let us tell others who we really are," she said. "This really changes that, and for the first time I get to go to the site and specify to all the people I know what my gender is."
Facebook, which has 1.15 billion active monthly users around the world, also allows them to keep their gender identity private and will continue to do so.
The change to the gender selection option is seen as a major step toward acceptance for people who don't self-identify as male or female, but the high-profile development seemed senseless to those who believe in two genders, no more.
"Of course Facebook is entitled to manage its wildly popular site as it sees fit, but here is the bottom line: It's impossible to deny the biological reality that humanity is divided into two halves: male and female," said Jeff Johnston, an issues analyst for Focus on the Family, an influential national religious organisation.
"Those petitioning for the change insist that there are an infinite number of genders, but just saying it doesn't make it so. That said, we have a great deal of compassion for those who reject their biological sex and believe they are the opposite sex."
Masen Davis, executive director of the Transgender Law Center, said it may be hard for some people to understand the importance of having the ability to select from multiple genders online. But he said many transgender people will be thrilled with the change.