Under an order of Parliament, which came into force on 19 July, the school will now be eligible to receive funding direct from the Higher Education Funding Council for England.
Until now the school, founded in 1898, has been an independent organisation and registered charity affiliated with the University of Liverpool School of Medicine.
However, the school said that over time, the lack of formal recognition as a higher education institution had disadvantaged LSTM, restricting access to research and capital funding and forcing it to operate different rules for overseas students.
The school has a research portfolio in excess of £200 million, focusing on infectious, debilitating and disabling diseases, and a teaching programme attracting more than 600 postgraduate students from over 65 countries.
Janet Hemingway, director of LSTM, said she was delighted that the school had been recognised as a higher education institution in its own right.
“Amongst many practical benefits it will improve our profile nationally and internationally and support our ambitions for continued growth and expansion,” she said.
Universities and science minister David Willetts added: “This announcement is another step towards creating a diverse and vibrant higher education sector.
“I congratulate Liverpool School of Tropical Medicine on this important achievement which will allow them to expand and build on their already excellent reputation globally.”
A statement from LSTM said it began the application process to become a higher education institution 18 months ago, working in close collaboration and consultation with the University of Liverpool.