The decision, which comes at a time of growing concern over cyber-security, applies only to the military's non-classified network.
But it could mean big changes for large portions of the armed forces, including the Marines, which had selectively banned social media on work computers.
The Department of Defense also had bans in place since 2007 on accessing certain bandwidth-gobbling Web sites like YouTube on its network.
"The purpose of the policy is to recognize that we need to take advantage of these Internet-based capabilities. These Web 2.0 tools need to be part of what we use," David Wennergren, a deputy assistant secretary of defense, told Reuters.
"And what we had were inconsistent approaches. Some websites were blocked and some commands were blocking things."
Social media are increasingly important for the U.S. military. Admiral Mike Mullen, who as chairman of the Joint Chiefs of Staff is the top U.S. military officer, has a Twitter feed with more than 16,000 followers.
U.S. Southern Command offered operational updates via Twitter on relief activities in Haiti.
REACHING OUT TO YOUNG SOLDIERS
Defense Secretary Robert Gates, 66, has said that he wants to use social networking to help the Pentagon interact with U.S. military members, many of whom are in their early 20s.
But opponents have cited the risks of information leaks, of opening gateways to hackers, along with a potential overload of precious bandwidth on the Defense Department's network.
The new policy says commanders will still need to defend against cyber-attacks and block access to online pornography, gambling and sites promoting "hate-crime related activities."
It also allows commanders to temporarily limit Internet access if the bandwidth is overwhelmed, a key caveat for U.S. forces fighting the wars in Iraq or Afghanistan, or stationed in remote, rugged places around the globe.
Wennergren said commanders still had authority to limit access to safeguard missions, perhaps banning use of social media ahead of a major offensive. The Defense Department will also be monitoring use of its network.
"There are two imperatives. One is the ability to share information. The other is about security -- we need to be good at both," he said.
Training people so they know what can and cannot be disclosed on the Internet is a more effective policy than simply banning use of social media on work computers, he said.
"You can't just have the policy be that you're going to block access to MySpace. Because there are 10,000 ways people could still compromise a mission -- by making a phone call, or sending an email," Wennergren said.
"So part of this is about having a trained workforce that is savvy in how you operate in the information age."