The ban on facial hair was introduced 49 years ago by the club's then-owner George Steinbrenner.
The current owner Hal Steinbrenner, son of the previous owner, announced that the club is now changing its stance on the issue. The decision comes after several years of internal discussions.
"Over the past few weeks, I have spoken to a large number of former and current Yankees - from several different eras - to get their views on our policy on facial hair and grooming", he says in a statement.
"After careful consideration, we will allow our players and uniformed staff to have well-groomed beards going forward", he adds.
As recently as Monday, the Yankees had sent reminders to each player to come clean-shaven for photography the next morning. However, player Devin Williams defied the reminder and had both a beard and mustache in his photo.
Outfielder Alex Verdugo was forced to trim his previously long hair when he joined the club before the 2024 season.