Transgender school pupils will be stopped from joining some PE lessons with children from the other biological sex.
The Government plans to allow mixed lessons in some sports, such as tennis.
But it is set to say that it would be dangerous and unfair to allow pupils born as males but now identifying as females, or vice versa, to join in mixed rugby sessions.
New advice will also recommend that trans pupils are blocked from using toilets and changing rooms designed for the opposite sex while schools will need to tell parents if their child wants to change their gender.
That comes after it emerged almost half of secondary schools in England allow their pupils to change their gender identity without their parents being told.
“In sports like rugby, it would be dangerous and unfair as biological boys are bigger and stronger,” a Government source said.
Rishi Sunak is due to release new guidance for schools in the coming weeks.
“Headteachers will be allowed to have mixed PE lessons where that is not such a worry — for example, tennis,” an insider told The Sun.
“But when sport is competitive, or when safety is a concern, girls’ spaces should be protected.”
It follows controversy surrounding a transgender athlete who ran in the London marathon’s women’s race, finishing ahead of nearly 14,000 women, who offered to give back her medal.
Glenique Frank, 54, from Northamptonshire, previously insisted she had not cheated by entering the race.
She crossed the line after four hours, 11 minutes and 28 seconds – coming in 6,160th place out of 20,123 competitors.
But Ms Frank has since insisted she will give back her medal if necessary.
“If they want me to give my medal back, I’ll say, “OK, fine. No problem,” she told the New York Post.
“If they really think I’ve stolen the place [of a female runner], I don’t mind giving the medal back, because I’ll run again next year for charity.”
“But I don’t want to apologise, because I didn’t do anything wrong,” Ms Frank added.
By Will Taylor@WillTaylor_news