The law "will strengthen our national security and uphold the ideals our fighting men and women defend," Obama told a cheering crowd of gay and lesbian service members and their supporters in Washington. "No longer will thousands of men and women in uniform be asked to live a lie or look over their shoulder while serving the country they love."
"Our people sacrifice a lot for their country, including their lives. None of them should have to sacrifice their integrity as well," he said. "This is the right thing to do for our military, and I believe it is the right thing to do period."
The law ends the legal underpinnings for the ban on openly gay troops, but it does not immediately overturn the policy itself.
Officials say the 17-year-old ban will remain throughout the military until the president, Defense secretary and Congress certify that the military is prepared to put in place a repeal. Then, a 60-day waiting period begins before the ban is officially removed from the books.
"I have spoken to every one of the service chiefs, and they are all committed to implementing this change swiftly and efficiently. We are not going to be dragging our feet to getting this done," Obama said.
While some advocates have bristled at the timing, many could not deny the enormity of the moment and said it would be a defining element of Obama's legacy.
"Clearly, this is President Obama's Lyndon Johnson moment in history," said Aubrey Sarvis, Army veteran and executive director for Servicemembers Legal Defense Network. "A measure of dignity has been restored to thousands of service members on active duty, and to over a million gay veterans who served in silence."
The move is expected to eventually end ongoing investigations and open the door to thousands of discharged service members to return to the military and resume their careers.
"I'm just incredibly proud of our country and of this military that so many service members will be able to serve with dignity and integrity," said Air Force Lt. Col. Victor Feherenbach, 41, the highest-ranking officer investigated under the policy. "It's actually taken a day or two to sink in, because it seemed so unbelievable at the time."
While it's unclear how vigorously the ban will be enforced during the interim, Feherenbach said there are already signs officials are aggressively pursuing the change.
"I just received an e-mail from my commander, and I understand that the Air Force Chief of Staff has sent out a note that said we're going to do this, we're going to follow the law, we're going to be professionals as we always have and we're going to respect each other," he said.
In the weeks ahead the Pentagon is expected to revise policies and regulations to reflect the repeal, and train leaders on how to enforce the rules. More than 2 million service members across the military are also expected to be briefed on what is expected of them and what is not.
"The implementation plan lays out an ambitious agenda of things that need to be done," said Defense Secretary Robert Gates last week. "How long that would take, frankly, I don't know."
Among the expected changes is non-discrimination against a military applicant who may volunteer that he or she is gay, opening the door to the return of thousands of service members whose careers were cut short after they were outed on the job.
"I just really miss it. I miss the people, the mission, the comraderie. I can't wait to get back in there and finish my career," said Mike Almy, an Air Force Major and 13-year veteran who was discharged four years ago after investigators learned he was gay through personal e-mails. He plans to re-enlist.
Nobody knows for sure how many of the estimated 14,000 gays and lesbians discharged because of their sexual orientation will want to re-enlist or still meet the requirements for active duty, including age and fitness levels.
But some advocates estimate up to a quarter of those discharged under "don't ask, don't tell" could return to the force.
"We expect that all who are otherwise qualified will be allowed to rejoin and at least pick up their careers where they left off," said Aaron Tax, legal director for the Servicemembers Legal Defense Network, who said many gay veterans were interested in continuing to work toward 20 years of service to earn valuable military retirement benefits.
Jason Knight, discharged after five years as a Navy Hebrew linguist, said he plans to re-enlist as soon as he can because there is such high demand for interpreters and intelligence analysts.
"Linguists have the highest security clearance and are essential in deciphering foreign intelligence," he said. "And anecdotally at least, they are the biggest field hit by 'don't ask, don't tell' next to pilots and medics... I'm going back to reach my 20 years of service and retire."
An estimated 800 mission-critical troops, including at least 59 Arabic and nine Farsi linguists, have been fired for being openly gay between 2003 and 2008, according to estimates provided by the Pentagon to SLDN.
A Pentagon study released earlier this month found that there would be minimal risk to military effectiveness in enacting a repeal.
Fifty to 55 percent of those surveyed said the repeal wouldn't have any effect, 15 to 20 percent said it would have a positive effect and 30 percent said the effect would be negative. The report also concluded that encounters with gay service members are common.
Obama, Chairman of the Joint Chiefs of Staff Adm. Mike Mullen and Defense Secretary Gates all had called for a repeal of the policy.
Four GOP senators voted in favor of repeal -- Susan Collins and Olympia Snowe of Maine, Scott Brown of Massachusetts and Lisa Murkowski of Alaska.
The most recent ABC News/Washington Post poll found 77 percent of Americans support allowing gays and lesbians to serve openly in the U.S. military, the largest show of support in the history of the policy.