"Earlier, we had only two categories, men and women. But in the upcoming census, we are including a ‘third gender’ category," said Bikash Bista, director of the Central Bureau of Statistics in Kathmandu.
Two years ago, the Supreme Court in Nepal ordered the government to enact laws to guarantee the rights of transgender, gay, lesbian and bisexual people.
Bista said the court’s ruling prompted the new category, though Nepal remains a deeply conservative country.
"We will send supervisors to each household and get the figures of the household, its members and their gender. This is when we count the number of transgenders," he said.
Sunil Babu Panta, Nepal’s first openly gay parliamentarian, who runs the Blue Diamond Society pressure group, said that the transgender community was delighted by the decision.
"This shows that the government has started to recognize them. I hope this will help to ensure their rights," he said.
"But challenges remain for the community as they have often been forced to leave their villages and taken refuge in cities due to discrimination."
Nepal plans to complete the census, which takes place every ten years, in two months. About 28 million people live in the mountainous country.
India will also have a transgender category in its 2011 census, the domestic Press Trust of India news agency reported on Sunday, though no government spokesman was able to confirm the plan.