Wilson wrote to the Nova Scotia Rainbow Action Project a week ago saying the financially-strapped province wasn't going to fund the operations.
But Wilson said Wednesday he changed his mind after meeting with the group and further reviewing medical evidence.
"This decision comes down to doing the right thing," he said.
The announcement will make Nova Scotia the eighth province to provide funding for gender reassignment surgery. Alberta, British Columbia, Manitoba, Newfoundland and Labrador, Ontario, Quebec and Saskatchewan offer varying levels of funding for the procedure.
Kevin Kindred, the chairman of the Rainbow Action Project, said he's pleased the province reversed its stance because for some people, the surgeries are medically necessary for mental health.
"This is the best and most effective method to return transgendered people to a good state of medical health," Kindred said.
"They'll go from being a drain on the health system ... to being positive, contributing members of society."
Wilson said he wasn't sure how much it would cost the province. But Kindred estimates there are at most about 10 Nova Scotians who would need varying levels of the surgery per year, costing anywhere between $30,000 to $60,000 per patient.
Wilson said the province will "move as quickly as it can" to set up standards of care and negotiate funding levels for the treatment, adding that the section of the physician's manual that prohibits funding for the surgery will be immediately removed.
The Health Department will begin researching whether there are medical professionals in Nova Scotia who can do the operations, and if not, where they can be done, he added.
"We believe many of the procedures involved with the surgery can be performed in the province," Health Department spokesman Tony Kiritsis said in an email.
"However, we will need to research this further to get an inventory of what can be done here and across Atlantic Canada."