After increasing criticism from politicians and the loss of two high-profile sponsors over its perennial decision to exclude gay groups, organizers of the nation’s largest St. Patrick’s Day parade have reversed course, and New York’s top Catholic is okay with that.

Organizers of New York City’s Saint Patrick’s Day Parade released a statement announcing that an LGBT employee group at NBC, OUT(at)NBCUniversal, has been given permission to march “under its own banner.” This will be the first time in the parade’s 252-year history that openly gay marchers will be allowed to identify themselves as such.

Parade organizers said the event was “remaining loyal to church teachings,” and Bill O’Reilly, the parade’s spokesman, said Cardinal Timothy Dolan, who will be formally introduced tonight at the 2015 grand marshal, was “very supportive” of the change.

On Wednesday, Dolan said that the parade committee that operates the annual event “continues to have my confidence and support.”

“Neither my predecessors as archbishop of New York nor I have ever determined who would or would not march in this parade … but have always appreciated the cooperation of parade organizers in keeping the parade close to its Catholic heritage,” he continued.

In March, the parent companies of Guinness and Heineken pulled their sponsorship of the 2014 parade, citing concern over its decision not to allow gay marchers. “Guinness has a strong history of supporting diversity and being an advocate for equality for all. We were hopeful that the policy of exclusion would be reversed for this year’s parade,” a Guinness representative said at the time. At the time, Cardinal Dolan declined to take a position on whether gay groups should be allowed to march, but he welcomed gays and lesbians marching with other organizations.

Parade organizers are welcoming the gay group because of threats from NBC to drop coverage, as well as financial concerns from lost sponsors, according to a report from the Irish Voice, which first reported the story.

Some Catholics have called on Cardinal Dolan not to take part in next year’s parade.

“Cardinal Dolan must publicly reject the offer to be Grand Marshal and encourage the organizers to cancel the parade rather that accede to the demands of NBC. This is an incredible chance to witness that the Church still actually believes what it is supposed to believe,” Pat Archbold wrote at the National Catholic Register.

Others lauded the decision.

“As an Irish-Catholic American, I look forward to a fully inclusive St. Patrick’s Day Parade that I can share with my wife and children, just as my own parents shared with me,” Sarah Kate Ellis, president and CEO of the gay-rights group GLAAD said.

Bucking his predecessors, New York’s Mayor Bill de Blasio skipped the parade last year, choosing instead to march in a smaller St. Patrick’s Day parade in Queens, New York, that allowed gay groups to march.

In 1993, the late Cardinal John O’Connor, facing gay protesters who staged a sit-in during the parade, vowed that he “could never even be perceived as compromising Catholic teaching” by entertaining their admission as an identifiable group in the event. “Neither respectability nor political correctness is worth one comma in the Apostles’ Creed,” O’Connor declared in his homily at a Mass for St. Patrick’s Day that year.

Boston’s St. Patrick’s Day parade, which also excludes gay groups, faced similar controversy last year. Boston’s newly elected mayor, Marty Walsh, skipped the event and the makers of Sam Adams beer withdrew sponsorship.

Gay Catholics have become increasingly hopeful by what they see as a softening tone among church leaders after Pope Francis said “Who am I to judge?” when asked about gay priests last year. Next month, when Catholic bishops from around the world meet in Rome to address pastoral issues facing families, they will specifically examine whether the church offers adequate pastoral care to same-sex couples and their children.

Material from the Associated Press and Religion News Service was used in this report.