It follows a 10-year campaign by forces charities, led by the Royal British Legion (RBL), to have the question included on the census as a means of better focusing support available for Armed Forces veterans.
The census is a survey that takes place every 10 years and provides a picture of all the people and households in England and Wales.
Census Day this time is 21 March, but people can respond as soon as they receive an official letter.
It must be completed by law and its answers help organisations make decisions on planning and funding public services, like transport, education and healthcare.
Encouraging all veterans to identify on the census form, Jo Baker, public affairs and campaigns manager for the RBL, outlined the difference the question's inclusion would make.
"The Royal British Legion was really pleased that the Office of National Statistics and the Government both agreed to include the question in this year's census," she said.
"This is the first time in history in the UK that this is going to be asked, so we're really delighted.
"It means that the Armed Forces community going forward, we're going to have a better idea of where they are, what their needs are, so that local authorities, other public bodies like the NHS and service charities, like the Royal British Legion, are going to be better prepared and know where to direct our resources.
"So, it means that the country can better uphold the principles of the Armed Forces Covenant, the promise that we've made with the Armed Forces community.
"We're just really delighted that we're going to be able to do that once we get this information," she added.
Also hailing the announcement as good news is Lieutenant General Sir Andrew Gregory, chief executive of SSAFA, the Armed Forces charity.
He said it would mean that future attempts to help veterans would be better managed, and appealed to all veterans to "come forward" and identify themselves on the census.
"I would ask veterans not to be shy about coming forward because so often they are too proud to ask for help," he said.
"So the combination of making them look at the census question, understand that they should be proud to be a veteran, but when they need help, being prepared to step forward and come to charities like SSAFA is terribly important."
Actively serving personnel, however, are encouraged to select 'no' on the survey question, due to security concerns.
Instead, the Office for National Statistics (ONS) will provide the details of those currently serving directly from the MOD.