Sindh was the first Pakistani province to introduce a quota for trans people in local governments.
Going forward, they will be reserved one percent of seats in county and local governments, Sindh Information Minister Said Rani said on Thursday.
Trans people should feel "that they are part of society," Rani said.
Transgender activists hailed the decision as a "big step".
Bindiya Rana, chairwoman of the organization "Gender Interactive Alliance", expressed hope that the quota would help transgender people to gain more rights and political representation.
In conservative Muslim Pakistan, transgender people face severe discrimination.
In addition to harassment, there are also repeated cases of killing and kidnapping.
Many of these cases are never reported to the police because those affected say they are afraid of discrimination there too.
In addition, transgender people are often rejected by their families and have to make ends meet with prostitution.
In September last year, Pakistan launched a telephone hotline for transgender people to report harassment.
Since 2018, trans people in the South Asian country have been able to change their gender in documents.
However, critics of the law continue to claim that changing the official gender should not be possible without a medical examination.