A panel of councillors for the university town in southern England have decided that all official forms should include an option of Mx - pronounced 'mix', with titles eventually being phased out from documents altogether.
The proposals have been laid out in a new report by the council's Equality and Diversity Review Group.
Councillor Tom Hayes, chair of the group, said in the report, "Clearly the council needs to build confidence in the monitoring that it does. Otherwise employees will go on declining to disclose and the council will keep on facing under-reporting."
The review found that the council's lesbian, gay, bisexual and transgender (LGBT) workforce was "very small", with staff reluctant to disclose their sexuality.
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The gender neutral titles are expected to help with making the council more accessible to a broader talent pool.
"The requirement to record a title could also be made optional rather than mandatory," the report said.
Oxford's plan comes a few years after Brighton and Hove City Council looked into titles and now offers the option of Mx on online forms, as well as the option of no title.
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