Manning, an enlisted soldier who served as an intelligence analyst in Iraq, is currently serving a 35-year military sentence at Fort Leavenworth.
In a statement after the decision, Manning said her new name is "a far better, richer, and more honest reflection of who I am and always have been -- a woman named Chelsea."
It is unclear what effect the court order will have on Manning's treatment in the military justice system. Courthouse News Service reported before the sentencing that a Fort Leavenworth spokeswoman said the facility does not provide any special medical treatment for transgendered inmates.
Manning is seeking hormone treatments to become a woman biologically.
The Defense Department announced last week that Maj. Gen. Jeffrey Buchanan had approved Manning's sentence, refusing to reduce it.
Manning is a hero to many people and a villain to others. Supporters say that the leaks, including thousands of pages of diplomatic cables and military documents, shed light on U.S. operations in Iraq and on despotic regimes around the world.
The leaks may have helped kickstart the "Arab Spring" demonstrations in North Africa and the Middle East. Tunisian President Zine El Abidine Ben Ali stepped down in 2011 amidst angry protests after Wikileaks released U.S. cables detailing his lavish lifestyle.