Chloe Allen, from Cumbria, joined the Scots Guards as a man in 2012 but began hormone therapy in the last month, and has officially changed her name.
The Army said it was delighted to have its first woman in a close-combat role.
Then Prime Minister David Cameron followed a recommendation in July from the head of the Army that women should be able to serve.
The application process for female recruits was due to open later this year.
But Guardsman Allen, who had official documents changed by deed poll from her birth name of Ben to reflect her new name and status, has now been informed she will be able to stay in the infantry, as a woman.
She told the Sun newspaper it was a relief to talk openly about her feelings.
Guardsman Allen had initially thought she would have to leave her post in the First Battalion Scots Guards.
But she decided to talk to a careers officer and was informed she could continue in her role as a rifleman and driver of a Mastiff armoured truck.
"All the paperwork within the Army, within the battalion, has been changed and sorted out. My passport will be done shortly," she said.
"It's brilliant, it's amazing... to say everything that I've wanted it to say and for me to still be serving as an infantryman is even better."
The Army has had an employment policy for transgender servicemen and women since 1999.
Last year Captain Hannah Winterbourne, who has risen to be the most senior transgender officer in the service, spoke about her transition and how she was acting as a mentor for other transgender soldiers.
General Sir James Everard, Commander of the Field Army, said: "I'm delighted to have our first woman serving in a ground close combat unit.
"The British Army is really proving itself as an inclusive organisation where everyone is welcome and can thrive.
"Recent awards from Stonewall and the opening up of all elements of military service to women are clear evidence of this.
"Being the first of anything takes courage."
A 24-year-old transgender soldier has become the first woman to serve on the front line with the British Army.