"New Zealand Rugby provided World Rugby with feedback on transgender participation guidelines, having considered feedback from various transgender and women's sport advocacy groups.
"Our feedback to World Rugby was that a more inclusive approach could be taken. And, while we support the focus on the safety of rugby, we aren't convinced the research presented to date shows transwomen present a significantly greater safety risk in women's elite and international competitions.
"World Rugby's guidelines don't apply to our community game here in New Zealand and we're committed to ensuring the game's inclusive and safe for all. We know there is more work to do and we want to get it right. We will be consulting more broadly and doing more work to develop guidelines that are relevant for New Zealand communities."
World Rugby added that it would be "regularly reviewing the guidance to monitor and consider any new evidence or research".
"This has been a complex and emotive process, but a necessary one," said Dr Araba Chintoh, who chaired the review.
"We set out to determine whether it would be possible to maintain inclusion in contact rugby based on the available research and evidence and rugby's unique context of combining strength, power, speed and endurance in a physical, collision environment.
"As we progressed through a comprehensive and inclusive review, it became clear there are compelling evidenced safety considerations which we simply cannot ignore.
"Unions will be able to exercise flexibility on a case-by-case basis at the community level of the game, for which the unions are responsible, while World Rugby will continue to prioritise inclusion strategies to ensure that the trans community remain an active, welcome and important member of the rugby family."
World Rugby chairman Sir Bill Beaumont added: "Rugby is a welcoming and inclusive sport and, while this has been a difficult decision to make, it has been taken following comprehensive consultation and engagement and for the right reasons, given the risk of injury.
"That said, we recognise that the science continues to evolve, and we are committed to regularly reviewing these guidelines, always seeking to be inclusive."
World Rugby's previous transgender policy followed the International Olympic Committee's policy, which currently states that transgender women must suppress testosterone levels for at least 12 months before competition.
