The 47-year-old officer will become the most senior woman in the service's centuries-long history, and will take over as the Royal Navy's Director of People and Training and Naval Secretary from next August.
Reflecting on the milestone, Cdre Terry said "someone has to be first", adding: "I have always thought of myself as a naval officer first, then a logistics officer, then Jude and finally as a female.
"The Navy genuinely doesn't look at your gender and is an equal opportunities employer – it wants you to be part of a team and deliver outputs to support operations."
Rear Admiral is one of the most senior ranks in the Navy, with officers attaining the position typically having their own flag flying on a ship and being responsible for an entire capability within the service.
The First Sea Lord Admiral Tony Radakin said he is "delighted" with Cdre Terry's promotion, hailing her as among the "trailblazers in the Royal Navy".
Who is Commodore Jude Terry?
Cdre Terry was born in Jersey when her father was away at sea aboard HMS Tiger and began training at Britannia Royal Naval College in 1997.
She was awarded an OBE in 2017 in recognition of her work in the Permanent Joint Headquarters (PJHQ), the operations hub for the UK military.
Watch: In October 1990, the first female Navy personnel to go to sea joined HMS Brilliant in Devonport.
During her time at Permanent Joint Headquarters, Cdre Terry was involved in the end of Britain's frontline operations in Afghanistan, overseeing the closure of bases at Lashkar Gar, Bastion and Kandahar.
She was also involved in the response to the Ebola virus in west Africa between 2014 and 2015.
Her career has seen her serve in locations including the Middle East, Far East and Caribbean, with time spent on board HMS Scott and HMS Ocean.
"I have been really lucky throughout my career," Cdre Terry said.
"I've enjoyed great jobs, wonderful support from my family, worked with great people, seized the opportunity to see the world and contribute to a number of operations which have made a difference to people's lives, including Afghanistan, Somalia and Sierra Leone to name a few."
This year has seen announcements made by the British Army on its first-ever female officer to lead a division-level command, as well as the Royal Fleet Auxiliary's first female commanding officer.
Cover image: MOD.