"Today we're taking a historic leap that will improve the quality of life for the trans population," said Rolando Jimenez, leader of the Integration and Homosexual Liberation Movement (Movilh). "A basic right, that of identity, is being recognized. It's a right that most of us have from birth but which is taken from the trans population at birth."
However, Jimenez believes the law should go further to include children younger than 14, adding that it's an "obvious violation of human rights that we hope will be corrected."
The gender identity law gained traction in the country following the international success of a 2017 Chilean film, "A Fantastic Woman," starring the transgender actress Daniela Vega.
The bill was first introduced by center-left President Michelle Bachelet, then faced fierce lobbying by conservative and religious groups until its eventual passage by lawmakers in September, nearly five years later.
The law marks an increasingly progressive tack in Chile, an Andean nation until recently dominated by a conservative, Catholic culture.
Chile legalized divorce in 2004, making it one of the last countries in the world to do so. And the country's ban on abortion, one of the strictest in the world, was lifted in 2017, though for special circumstances only.
The transgender bill signed into law on Wednesday defines gender identity as a personal conviction of whether a person sees himself or herself as male or female, irrespective of their physical state or the gender or name assigned to them in the country's civic register.