Foreign Secretary Boris Johnson has lifted a ban on UK embassies and high commissions flying the rainbow flag during gay pride events.
In one of his first policy shifts since being appointed to the role, Mr Johnson overturned the decision of his predecessor Philip Hammond.
Previously only the Union flag, the flag of the EU, and the flags of the nations and overseas territories of the UK could be flown from Foreign Office buildings.
However, the decision on whether and when to raise the gay pride banner will be for individual ambassadors and high commissioners to take, taking into account local conditions.
As Foreign Secretary, last month Mr Hammond rejected a call from the House of Commons Foreign Affairs Committee to drop his opposition to the use of the rainbow flag.
In a report on the Foreign and Commonwealth Office's (FCO) human rights work, the committee said Mr Hammond's decision not to fly the flag for Pride 2015 in London "signalled an apparent change in FCO policy and sent a message that contradicts much of the actual work and objectives of the FCO".
The cross-party report had recommended that the flag should be allowed to be flown, and that missions should fly the rainbow flag on the International Day Against Homophobia, Biphobia and Transphobia (IDAHOBIT) which falls on May 17, in countries where official intolerance prevents the staging of gay pride events.