The policy says that the clothing should reflect sincerely held beliefs and should not damage military readiness or affect unit cohesion, order or discipline.
The change is designed to allow troops to freely express their religion, as required by the 2013 National Defense Authorization act, Stars and Stripes reported.
Jews, Sikhs and Muslims in the military have been requesting a change in policy in order to comply with their religions.
Requests for accommodation that conflict with existing policies, including the wearing of beards or headgear, will require a waiver issued by department secretaries or military officers.
"When requests for accommodation are made, the needs of the requesting service member are balanced against the needs of mission accomplishment," Pentagon spokesman Lt. Cmdr. Nathan Christensen wrote in an email. "Only if it is determined that the needs of mission accomplishment outweigh the needs of the service member may the request be denied."
In December, the U.S. Commission on Civil Rights sent a letter to Defense Secretary Chuck Hagel about department policies that could exclude religious Americans from military service.