This year members of the military marched in London's gay pride festival
The Army has joined forces with leading gay rights group Stonewall to promote tolerance within its ranks.
Head of the British Army General Sir Richard Dannatt said discrimination prevented the full contribution that is "vital for our success in operations".
Stonewall said it had yet to set up an action plan, but that it would initially focus on recruitment and retention of military personnel.
Stonewall brought legal action that removed a military ban on gays in 2000.
Tolerance and trust
The Army is the 400th member of Stonewall's Diversity Champions programme, and the final branch of the military to join.
General Dannatt said: "One of the Army's six Core Values is 'Respect for Others' and it is therefore our absolute duty to treat our fellow soldiers as we would wish to be treated ourselves.
"Discrimination against those in the Army who are lesbian, gay and bisexual does not give them a chance to contribute or to play a full part in the teams that are vital for our success on operations."
In our view, there is no reason at all that in 10 or 15 or 20 years time there shouldn't be openly gay personnel serving in the most senior ranks
Chief executive Stonewall
General Dannatt added that he looked forward to working with Stonewall, and that promoting tolerance was part of the trust that must exist between soldiers and their country.
Ben Summerskill, chief executive of Stonewall, said as with any other organisation it works with, it would agree a work-plan with the Army.
He said this would include ways to encourage the recruitment and retention of lesbian, gay and bisexual people, provide support on how to deal with complaints of bullying, and hold training sessions for senior personnel.
Mr Summerskill said: "In our view, there is no reason at all that in 10 or 15 or 20 years' time there shouldn't be openly gay personnel serving in the most senior ranks."
He said that, having spoken with serving gay military personnel, the knowledge that General Dannatt was engaging with the issue had already re-enforced their commitment to the forces.
Mr Summerskill acknowledged that, as with any large organisation, it is unrealistic to stamp out homophobic attitudes altogether, but that it was imperative to create a culture where people know that if they report bullying they will be taken seriously.
He also emphasised that huge progress had already been made since the military ban on gays was overturned.
You can be confident that it's not just a piece of paper on the wall, there is something going on in the background
Former Navy warrant officer
"Until then no-one could complain about homophobic bullying because the Army could say 'bullying is terrible, and you're sacked - thanks for bringing it to our attention'," said Mr Summerskill.
He said Stonewall's core message was that homophobic bullying should be dealt with in just the same way as any other sort of bullying.
"As with so much advice, you just treat people the same way as everyone else," he said.
One former gay member of the Royal Navy, David Small, who is now a member of Stonewall, said the organisation's involvement with the Army would send a strong message to potential gay recruits.
He said with Stonewall's involvement "you can be confident that it's not just a piece of paper on the wall, there is something going on in the background."