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A transgender football player has been told she cannot play for her country's Australia Rules women's team - sparking uproar.

The Australian Football League has come under fire after ruling Hannah Mouncey is ineligible be selected just a day before the national draft for the professional women's competition.

They admitted they took her "transgender strength, stamina, physique" into consideration while making the decision.

Hannah used to be called Callum and was a highly-rated member of the Australian men's handball team which narrowly missed out on a place at the Rio Olympics last year.

She applied for the draft for next year's AFL Women tournament, having played women's Australian Rules football at club level in Canberra this year.

(Image: AFP)

But on the eve of Wednesday's draft, the AFL said a subcommittee set up to rule on Mouncey had rejected her nomination.

"The subcommittee carefully considered all of the information provided by Hannah, as well as the available data on transgender strength, stamina, physique along with the specific nature of the AFLW competition," the sport's governing said in a statement on Tuesday.

The AFL said the decision only applied to the draft and the 2018 competition, and was not permanent.

Mouncey said she was "extremely disappointed" with the decision but grateful to be given the green light to continue playing in the Canberra competition.

"Despite not being able to take part in the draft, the AFL has given me the all clear to play for Ainslie next year in the AFL Canberra competition for which I am very grateful and look forward to doing in 2018, before hopefully being able to nominate for next year's draft," she said.

Mouncey, who stands 190cm and weighs 100kg, played eight matches and kicked 17 goals for Ainslie in the Canberra Women's League, according to the AFL's records.

The AFL Players Association accused the AFL of lacking "clear guidelines" for transgender players.

"No athlete should face such confusion around their eligibility for an elite competition just days out from a draft," AFLPA general manager of player relations Brett Murphy said in a statement.

"We have urged the AFL to prioritise the development of guidelines detailing the process and parameters for entry into the AFLW competition, so that Hannah and any other players have a clear understanding of their eligibility."