• Lord Coe added the decision was "guided by the overarching principle which is to protect the female category".
World Athletics has banned transgender women from competing in the female category at international events.
The governing body's president, Lord Coe, said no transgender athlete who had gone through male puberty would be permitted to compete in female world ranking competitions from 31 March.
A working group will be set up to conduct further research into the transgender eligibility guidelines.
"We're not saying no forever," he said.
Under previous rules, World Athletics required transgender women to reduce their amount of blood testosterone to a maximum of 5nmol/L, and stay under this threshold continuously for a period of 12 months before competing in the female category.
Lord Coe added the decision was "guided by the overarching principle which is to protect the female category".
He noted that there are currently no transgender athletes competing internationally in the sport.
"Decisions are always difficult when they involve conflicting needs and rights between different groups, but we continue to take the view that we must maintain fairness for female athletes above all other considerations," said Lord Coe.
"We will be guided in this by the science around physical performance and male advantage which will inevitably develop over the coming years. As more evidence becomes available, we will review our position, but we believe the integrity of the female category in athletics is paramount."
The Council agreed to set up a working group for 12 months to "further consider the issue of transgender inclusion".
An independent chair will lead the group, while it will also include up to three council members, two athletes from the Athletes' Commission, a transgender athlete, three representatives of World Athletics' member federations and representatives of the World Athletics health and science department.
It will consult specifically with transgender athletes, as well as review and commission research and put forward recommendations to the Council.
DSD rules also changed
The World Athletics Council also voted to reduce the amount of blood testosterone permitted for athletes with differences in sex development (DSD) such as South Africa's Caster Semenya.
DSD is a group of rare conditions whereby a person's hormones, genes and/or reproductive organs may be a mix of male and female characteristics. Some of those affected prefer the term "intersex".
DSD athletes will be required to reduce their blood testosterone level to below 2.5 nanomoles per litre, down from five, and must remain under this threshold for two years in order to compete internationally in the female category in any track and field event.
Under previous regulations, DSD athletes were only restricted in events ranging from 400m to a mile.
Interim provisions will be introduced for DSD athletes already competing in previously unrestricted events, requiring them to suppress their testosterone levels below 2.5nmol/L for a minimum of six months before they are allowed to compete again.
Coe said this will impact 13 DSD athletes, seven (55%) of whom compete in running events above a mile, with six (45%) in sprinting events below 400m.
He added none of the 13 will now be able to compete in the World Athletics Championships in Budapest in August, but will be eligible for future events, including the Paris 2024 Olympics, "if they maintain their testosterone at the required level".
Semenya, who refuses to take testosterone-reducing drugs, won 800m Olympic gold in 2012 and 2016 but has not been able to compete in the event since 2019, when World Athletics introduced the previous restrictions.
'Little support' for previous preference - World Athletics
As recently as January, World Athletics said its "preferred option" was to continue to allow transgender women to compete in the female category but to tighten the sport's eligibility rules, still using testosterone limits as the basis for inclusion.
It had proposed that transgender women would have to reduce their blood testosterone level to below 2.5nmol/L for two years, bringing it in line with amendments made last year by the UCI, cycling's world governing body.
However, World Athletics said there was "little support" for this option when it was presented to stakeholders, who included member federations, athletes, coaches, and the International Olympic Committee (IOC), as well as representative transgender and human rights groups.
Many argue that transgender women should not compete in elite women's sport because of any advantages they may retain - but others argue that sport should be more inclusive.
The debate centres on the balance of inclusion, sporting fairness and safety in women's sport - essentially, whether transgender women can compete in female categories without an unfair advantage.
The IOC's framework on transgender athletes - released in November 2021 - states that there should be no assumption that a transgender athlete automatically has an unfair advantage in female sporting events, and places responsibility on individual federations to determine eligibility criteria in their sport.
In February, UK Athletics said it wanted a change in legislation to ensure the women's category is lawfully reserved for competitors who are recorded female at birth.
The governing body said all transgender athletes should be allowed to compete with men in an open category to "ensure fairness" in women's competition.
What are the rules in other sports?
In June 2022, Lord Coe welcomed the move by Fina - swimming's world governing body - to stop transgender athletes from competing in women's elite races if they had gone through any part of the process of male puberty, insisting "fairness is non-negotiable".
Fina's decision followed a report by a taskforce of leading figures from the world of medicine, law and sport that said going through male puberty meant transgender women retained a "relative performance advantage over biological females", even after medication to reduce testosterone.
Fina also aimed to establish an 'open' category at competitions, for swimmers whose gender identity is different than their sex observed at birth.
In 2022, British Triathlon become the first British sporting body to establish a new 'open' category in which transgender athletes can compete.
The Rugby Football League and Rugby Football Union also banned transgender women from competing in female-only forms of their games.
It followed World Rugby becoming the first international sports federation to say transgender women cannot compete at the elite and international level of the women's game in 2020.
Some critics have said that these rules are discriminatory.
Olympic diving champion Tom Daley said he was "furious" at Fina's decision to stop transgender athletes from competing in women's elite events, saying: "Anyone that's told that they can't compete or can't do something they love just because of who they are, it's not on."
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