Nottingham Girls' High School, which is run by the Girls' Day School Trust, will only be admitting students based on their legal sex record rather than their gender identity.
However, the decision has been condemned by the school's local MP, who has called on the Trust to have conversations with and seek advice from other local organisations.
Nottingham East MP Nadia Whittome told ITV News Central: "The trust is hiding behind the Equality Act as a reason for this policy not to admit transgender girls.
"But the Equality Act itself is clear on this, there's a provision in it that allows single sex schools to maintain their single sex exemption while also admitting pupils of the opposite sex in exceptional circumstances."
She adds: "What isn't so clear and what lawyers are concerned about is that in fact the trust's new policy is the one that could be unlawful."
Meanwhile, the trust explained that the move is to protect its status as a single-sex school.
'The trust is hiding behind the Equality Act', Nottingham East MP Nadia Whittome tells ITV Central
The trust stressed that any student already attending and wishing to transition or explore their gender identity will be supported, and able to remain there.
Cheryl Giovannoni, Chief Executive Officer of the Girls' Day School Trust, said: "It is important to state first and foremost that the underlying principle of our policy is to offer a supportive educational environment to those students who are exploring their gender identity or in the process of transitioning.
"Our trans students are welcome in our schools and our policy primarily sets out ways in which schools can support them.
"A trans student already at our school can remain at the school for as long as they wish to do so. Young people exploring their gender identity need space and time to make decisions, free of pressure.
"The school has a responsibility to support a trans pupil and ensure measures are put in place to enable them to remain at their school. We will work together with them to make the best choices for their long-term wellbeing.
"GDST schools are able to operate a single-sex admissions policy, without breaching the Equality Act 2010 on the basis of an exemption relating to biological sex.
"Under current laws and guidance, the GDST believes that an admissions policy based on gender identity rather than the legal sex recorded on a student’s birth certificate could jeopardise the status of GDST schools as single-sex schools under the act. We will continue to monitor the legal interpretation of this exemption."