"Giving blood is an act of generosity, of civic responsibility, and the donor's sexual orientation cannot be a condition," Marisol Touraine announced in Paris.
"While respecting patient safety, today we are lifting a taboo," she said.
Touraine said the lifting of the ban, promised by Francois Hollande in his presidential campaign, will happen in stages, starting next year.
At first, donation of "whole blood" the red cells, plasma and platelets will be open to gay men who have not been sexually active for the preceding 12 months, she specified.
For donations of only plasma, the liquid component of blood, donors will be considered if they have not had sex with another man for four months, or were in a monogamous relationship.
Experts will then analyse whether the change had brought about any additional risk, after which measures may be relaxed further in 2017, the minister said.
In other countries with similar waiting periods for donors, including Australia, Britain, Japan and Sweden, rights groups criticise the measure as discriminatory, given that no similar condition exists for heterosexual men or women.
US regulators in May recommended lifting a lifetime ban on blood donations by gay men, but also with a 12-month waiting window.
On its website, the US Food and Drug Administration says men who have sex with men are "at increased risk for HIV".
"Men who have had sex with other men represent approximately two percent of the US population, yet are the population most severely affected by HIV," it states.
The issue is sensitive in France, where hundreds of people died in the 1980s after HIV-tainted blood was distributed by the national blood transfusion centre.
Much of the contaminated blood was exported, leading to the infection and deaths of hundreds more.
Several senior civil servants, including the head of the transfusion service, were jailed or fined.
In 1999, then prime minister Laurent Fabius, now foreign minister, and his social affairs minister were cleared of wrongdoing in the scandal.
The health minister was convicted but not given a punishment.
Mandatory HIV testing of donated blood began in 1985.
In April this year, the EU's top court ruled that governments can ban homosexual blood donors if they can show it is the best way to limit the risk of HIV infection.
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