Announcing the decision, Queensland Transport Minister Scott Emerson said it was a "common sense approach" to the issue and only cyclists with "genuine religious beliefs" will be excused.
"After applying a common sense approach we will introduce exemptions for those who want to cycle but for religious reasons, may not be able to wear a helmet," the minister said.
"They just can't wrap a towel around their heads go ride a bike and claim that's exemption from wearing a helmet," he said. "This is for genuine religious beliefs and for genuine religious exemptions."
Emerson reviewed the law, after Jasdeep Atwal, a Queensland Sikh, successfully challenged a fine because his religion requires him to wear a turban.
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Emerson said he had waited to see the outcome of the court case before making any law changes.
"By amending the Queensland Road Rules we will join Victoria, South Australia and Western Australia which also have these exemptions," Emerson said.
"Similar to Western Australia, there will be no requirement to actually apply for these exemptions which will make for a more streamlined process reducing the need for unnecessary red tape."
"But the fact is the Sikh community has been working for a long long time on this and they have done a lot of work on this. I was just the face of the cause," Atwal said, quoted by ABC News.