The new rule by the international basketball federation (FIBA) allows female players to wear hijabs and male players to wear turbans and yarmulkes.
The move would allow the Sikhs to play international basketball matches with their headgears intact.
"Removing the ban would make the sport bigger and more popular," said Brendan Schwab, the executive director of the World Players Association after Federation of International Basketball Associations (FIBA) took a decision in this regard at its meeting in Switzerland today.
The World Players Association believes the long-standing imposition of the ban highlights the need for international sporting bodies such as FIBA to reform their governance and practices in relation to human rights, a media statement said.
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FIBA had previously banned headgear on safety grounds, but began a review of its policy, and granted exemptions, from September 2014.
At its congress in Hong Kong, FIBA agreed a new rule to come into force in October this year that will allow players to wear ratified headgear, that minimises the risk of injury and is the same colour as a team's kit.
Its team were asked to remove their hijab and refused, thereby forfeiting its match with Mongolia. FIBA insisted its laws held no religious connotation in the wake of the protest.
This was despite several other sports at the Games allowing competitors to wear the hijabs.