A council committee has decided to refer to the lesbian, gay, bisexual and transgender community as LGB&T.
The common acronym LGBT is usually taken to include sexual orientations, such as asexual, and gender identities, such as non-binary or genderqueer.
But the Middlesbrough Council panel said it wanted to differentiate between sexual preference and gender identity.
Co-founder of Teesside charity TransAware Ellie Lowther said it was a "massive stride forward".
"I think there's a discussion to be had and I think it's currently not being had," she said.
"Middlesbrough are ahead of the curve in this respect."
A report to committee said although LGBT was "arguably the most generic and commonly used", it recognised other designations existed.
The adult social care and services scrutiny panel considered other options including LGBTQ+ and LGBTQQIP2SAA.
LGBTQ+ refers to lesbian, gay, bisexual, trans, queer/questioning, with the plus sign signifying a desire to be inclusive.
LGBTQQIP2SAA stands for lesbian, gay, bisexual, transgender, questioning, queer, intersex, pansexual, two-spirit (2S), androgynous and asexual.
Two-spirit is term used by some indigenous North Americans to describe those who fulfil a traditional third-gender ceremonial role, the Local Democracy Reporting Service said.
Ms Lowther said the "alphabet soup" of long acronyms with 10 or more letters was "ridiculous".