The Miss Panama organization announced that starting this year, the pageant would include transgender women "who have completed all their legal and medical procedures" in its competition.
The contest, which is responsible for choosing the country's representative for the Miss Universe pageant, said the decision was made "after plenty of conversations and in line with the rules of the Miss Universe organization," reports AFP.
Miss Panama "will permit women officially legally recognized in the country," which will "open the door to transgender women who have completed all of their legal and medical procedures," the organization said.
Miss Universe requires that each national event allow people legally recognized as women to participate in that particular country.
The Miss Universe competition, which airs in more than 190 countries to at least half a billion viewers, lifted a ban on transgender contestants in 2012, reports Reuters.
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But it was not until 2018 that the first openly transgender woman, Spain’s Angela Ponce, competed in the Miss Universe pageant.
Panama joins a small, but growing number of countries that accept transgender contestants in their national beauty pageants, which include Spain, Canada and Nepal.
In 2018, the first indigenous winner of Señorita Panama, Rosa Montezuma, competed in Miss Universe, but did not place.
The president of Miss Panama, Cesar Anel Rodriguez, told AFP on Tuesday that the country's move is a response to the Miss Universe regulation in regards to transgender women.
"We investigated the issue of people who are legally recognized for changing their gender" in Panama, he said.
He said that a 2018 announcement indicated that at least 10 transgender women had been recognized in the civil register.
"Guaranteed to be an inclusive organization, we approved this decision based on strict legal guidelines and according to previous international agreements," the organization's statement said.
For now, there are no transgender women registered for the pageant, according to its officials.