TextFormField(
   keyboardType: TextInputType.text,
   controller: _userPasswordController,
   obscureText: !_passwordVisible,//This will obscure text dynamically
   decoration: InputDecoration(
       labelText: 'Password',
       hintText: 'Enter your password',
       // Here is key idea
       suffixIcon: IconButton(
            icon: Icon(
              // Based on passwordVisible state choose the icon
               _passwordVisible
               ? Icons.visibility
               : Icons.visibility_off,
               color: Theme.of(context).primaryColorDark,
               ),
            onPressed: () {
               // Update the state i.e. toogle the state of passwordVisible variable
               setState(() {
                   _passwordVisible = !_passwordVisible;
               });
             },
            ),
          ),
        );

@override
  void initState() {
    _passwordVisible = false;
  }

bool _passwordVisible;

@override
void initState() {
    _passwordVisible = false;
    super.initState();
}

// ...
TextFormField(
  obscureText: !_passwordVisible,
  decoration: InputDecoration(
    hasFloatingPlaceholder: true,
    filled: true,
    fillColor: Colors.white.withOpacity(0.5),
    labelText: "Password",
    suffixIcon: GestureDetector(
      onLongPress: () {
        setState(() {
          _passwordVisible = true;
        });
      },
      onLongPressUp: () {
        setState(() {
          _passwordVisible = false;
        });
      },
      child: Icon(
          _passwordVisible ? Icons.visibility : Icons.visibility_off),
    ),
  ),
  validator: (String value) {
    if (value.isEmpty) {
      return "*Password needed";
    }
  },
  onSaved: (String value) {
    _setPassword(value);
  },
);