The government had previously stated no new GCSEs would be introduced in this parliament.
In March, School Standards Minister Nick Gibb argued not everything needed to be taught at GCSE, adding: "We value British Sign Language, however a huge number of steps would have to be gone through for the BSL qualification to be accredited as a GCSE."
An online crowdfunding page set up to help pay for the family's legal challenge to the government ruling raised more than £6,000.
Steve Haines, from the National Deaf Children's Society said there were 45,000 deaf children in the UK who wanted to sit a BSL GCSE and described the turnaround as "a powerful signal to deaf children everywhere".
However, he said the "campaign isn't over yet" and government and exam regulator Ofqual must do "everything they can... to develop this GCSE as quickly as possible".
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