TfL said the move was designed to ensure all passengers felt "welcome" and it has been warmly welcomed by the LGBTQ campaign group Stonewall.
"Language is extremely important to the lesbian, gay, bi and trans community, and the way we use it can help ensure all people feel included," said a Stonewall spokesman.
"We welcome gender neutral announcements to be rolled out across TfL as it will ensure that everyone — no matter who they identify as — feels accounted for."
"I am so impressed by Transport for London's decision, especially with it coming within a summer of incredible LGBTQ Pride celebrations," said BBC presenter and journalist Ben Hunte.
Hunte is the presenter of Gay Britannia on BBC Radio 4 Extra, and was recently invited by Prime Minister Theresa May to a reception at Downing Street to "celebrate the LGBT community."
"People have a broad spectrum of gender identities, which could be as a man or as a woman (binary) or in between those identities (non-binary) or as non-gender. All of these unique identities are becoming more and more recognized and respected within society. It's time for all of our country's organizations to step up their practices and promote love and equality wherever possible," Hunte told Sputnik.
But not everyone has welcomed the idea.
The beautiful, civilized phrase "ladies and gentlemen" has fallen victim to gender ideology https://t.co/MCuU9kHPoJ— Sohrab Ahmari (@SohrabAhmari) 13 July 2017
The new phrase will be applied to a series of new pre-recorded announcements which will be made across the capital's transport network later this year.
"We want everyone to feel welcome on our transport network," said Mark Evers, director of customer strategy at TfL.
"We have reviewed the language that we use in announcements and elsewhere and will make sure that it is fully inclusive, reflecting the great diversity of London," he said.
Few men would object to being called a gentleman but many feminist women object violently to being described as "ladies," as they deem it a patronizing and condescending term.
But the main objections to the phrase "ladies and gentleman" is that it acknowledges only two genders when many transgender people claim they are a third gender which is neither male or female.
The change is backed by the Mayor of London, Sadiq Khan.
"TfL serves a vibrant, diverse and multicultural city, and provision of an inclusive transport service is at the heart of TfL's purpose," he said.
"I am aware however, that some customers may not relate to or feel comfortable with the way that certain station announcements are made," he added.