Swim England announced an updated transgender and non-binary policy on Monday with a "female" category restricted to athletes assigned female at birth and a new "open" category for everyone else.
The national governing body for swimming in England said the policy, which comes into effect in September, would apply to its swimming, artistic swimming, diving and water polo competitions.
The "open" category will be for those assigned male at birth, trans or non-binary competitors.
The policy also allows athletes to self-ID in low-level unlicensed, or recreational, events.
Water polo, which stands apart as a contact sport, will allow self-ID up to the age of 16 after which competition will be divided into "female" and "open" categories.
"It is widely recognised that fairness of competition must be protected and Swim England believes the creation of open and female categories is the best way to achieve this," a statement said.
"The updated policy ensures there are entry-level competitive opportunities for transgender people to participate in the majority of our disciplines within their gender identity.
"In order to progress further, however, the female/open categories are utilised as a means to protect fair competition within the sporting pathway."
Swim England said that restricting certain competition to those assigned female at birth is "justified and proportionate in the pursuit of fair competition."
Transgender youth charity Mermaids called on Swim England to reverse its decision.
"Swim England's trans policy is disappointing. While trans kids can play authentically in non-competitive environments, the policy fundamentally denies trans girls the right to compete as themselves," it said on Twitter.
World Aquatics voted last year to restrict participation of transgender athletes in elite women's competitions and create a working group to establish an open category.
World Athletics last month banned transgender women from competing in elite female competitions and tightened testosterone restrictions for other athletes.