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The memo also ceases the use of government funds for gender-reassignment surgery for active personnel.
However, President Trump left Defense Secretary Jim Mattis to decide whether to retain existing transgender recruits.
The reinstated ban, justified on grounds of cost and disruption, faces a legal challenge by transgender rights activists.
Jennifer Levi, an official at Glad (GLBTQ Legal Advocates & Defenders), said in a statement: “This policy is a shameful slap in the face to people who put their lives on the line everyday to defend our country…
“We are moving quickly with our plaintiffs to see that a court puts a stop to this latest demonstration of President Trump playing politics with people’s lives.”
Between 4,000 and 10,000 US active-duty and reserve service members are believed to be transgender.
After the Obama administration announced in 2016 that transgender people would be allowed to serve openly in the military, many active duty members came out.
The memo was widely anticipated following the president’s tweets about the issue last month.
President Trump directed the military to “return to the longstanding policy and practice on military service by transgender individuals prior to June 2016”.
Donald Trump suggested that President Obama had not thought through whether the policy would “hinder military effectiveness and lethality, [or] disrupt unit cohesion”.
The president said he had done the Pentagon a “great favor” by banning transgender troops, saying the issue had been “complicated” and “confusing” for the military.
The Obama-era policy had included a provision for the military to provide medical help for service members wanting to change gender.
In his memo, President Trump directed the Department of Defense and Department of Homeland Security to stop using government funds for gender-reassignment procedures unless it was necessary .
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