Politicians of all stripes debated and passed a bill on the opening day of the spring sitting that would allow the support groups in every school if students wanted them.
Education Minister Gordon Dirks said recent discussions with students, teachers, administrators and other stakeholders made the decision inevitable.
"I am convinced that there is only one way forward," Dirks told the assembly.
"I am pleased therefore to table today a draft amendment to Bill 10 that stresses the importance that ensuring every student in Alberta that feels the need for a GSA can have one."
The alliances are peer-support groups for gay students aimed at making them feel welcome and at helping to prevent them from being bullied.
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There are 94 such clubs in schools in Edmonton and Calgary but none in rural areas or faith-based schools. Catholic school officials, saying they already have supports to make all kids feel included, have resisted the clubs.
The issue divided the house in the last two sittings. Last spring, the Tories and the Wildrose voted down a non-binding resolution supporting gay-straight alliances.
Last fall, the Tories introduced Bill 10, which would have allowed gay-straight alliances, but not necessarily on school grounds.
Bill 10 was brought in late in the sitting to knock off the order paper a private member's bill from Liberal house leader Laurie Blakeman.
Critics at the time said the bill would have effectively segregated gay students.
Premier Jim Prentice put the bill on hold pending further consultation.
On Tuesday, Dirks thanked Blakeman for her work, and Blakeman became emotional when she responded in turn.
"It's hard to contain my joy," said Blakeman, her voice breaking. "Today's announcement is a victory for safety and inclusivity, and proof of the value of an effective opposition."
NDP Leader Rachel Notley applauded the change, but chided the PCs for having to be "dragged across the finish line."
"All of this is a long overdue step in the right direction," Notley told the house.
Dirks said the consultations with students were particularly poignant.
"You would have heard students talking about the taunting, mocking and bullying they have suffered because of their sexual orientation," he said.
"You would hear them speak of parents who don't understand them, of online bullying and of suicidal thoughts.
"They told me, sometimes in tears, how alone and helpless they have felt when caring friends and sympathetic teachers are not around."
The revised bill also amends a controversial section of Alberta's human rights act that allows parents to pull students out of class when sexual orientation is taught.
Critics have said the "sexual orientation" phrase stigmatized the LGBTQ community by implying it was a topic to be shunned.
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