Teachers will have to call pupils by their preferred name and pronoun once their parents have consented, according to new guidance.
Children will also be allowed to wear the opposite sex's uniform if both the school and parents agree with the pupil's wish to socially transition.
The official guidance is set to be announced next week and will include rules about the use of toilets for those who identify as a gender different to their biological sex.
Schools will be required to offer single-occupancy toilets that can be locked from the inside for these students.
However, parental consent does not guarantee pupils will be allowed to "socially transition" at schools.
This is when a person is treated as a gender different from their biological sex but without medical interventions like puberty blockers or hormones.
Teachers are also expected to be instructed not to use a new name or pronoun at a pupil's request.
The guidelines are due to be published before Parliament's summer recess and will be sent to all schools in England.
School leaders will be able to give feedback on the proposals, which are not mandatory, before they are finalized and sent to staff, probably by the end of the year.
One source said each decision on how to treat trans pupils would be made on a case-by-case basis, with "checks and balances" along the way.
"Parents are informed and involved in the decision-making process unless there is a major safeguarding issue," they told the Daily Mail.
"Lots of things will be taken into account, for example, the age and maturity of the student, and if they have been living a certain way for some time beforehand.
"It's absolutely not going to be the case that children can come in and socially transition from one day to the next."
Women's rights campaigner Maya Forstater added: "The Department for Education is so near and yet so far with this guidance.
"She questioned whether teachers would be able to enforce sex-based rules if they 'were not allowed to say what sex children were."
It comes after the Arts Council of Wales is set to remove male and female pronouns like “he/him” and “she/her” from the body’s official documentation.
The taxpayer-funded body, responsible for supporting the arts on behalf of the devolved government, will replace the gendered pronouns with the gender-neutral pronouns “they/them”.
The proposals have caused concern among those critical of gender ideology - the view that self-identified gender, or lack of binary gender, takes precedence over biological sex.
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