Some reddit moid who did his research
Professor of Sociology Kylan Mattias de Vries, notes that the term was created "In 1990, at the third annual Native American/First Nations gay and lesbian conference in Winnipeg, Manitoba, Canada". [1]
This English term was not a translation of an original Ojibwe term, nor did it represent a traditional Ojibwe concept or cultural practice. De Vries explains "The concept and word two-spirit has no traditional cultural significance", and adds that the corresponding term in the Ojibwe language was also created at this time. He observes "Because this term was recently created, it has no linguistic equivalent or meaning in other nations and tribes"