Northern Territory Chief Minister Lia Finocchiaro has declared female prisons should house women only, saying "if you're born a bloke, you're going to a men's prison".
The territory is the first Australian jurisdiction to enact such a policy.
Ms Finocchiaro said her Country Liberal Party government was taking a common sense approach after receiving correspondence from conservative think tank the Women's Forum Australia.
The forum wrote to the prime minister and every state and territory leader protesting that male offenders were permitted to enter women's prisons "under the guise of gender identity".
Forum CEO Rachael Wong urged a ban on the practice, saying it posed a safety risk to women in jails.
She cited a recent case of a female inmate being sexually assaulted after she was forced to share a cell in South Australia with a transgender inmate who had a history of violence against women.
Ms Finocchiaro said that after receiving the forum's letter she tasked the NT's corrections minister and commissioner with strengthening government policy, and a "proper classification process" now applied.
"This has resulted in zero men being placed in women's prisons, and that will continue under my watch," she said in a statement.
"The former Labor government let crime spiral out of control, yet still found the time to adopt a woke transgender prisoner policy where self-declaration was enough."
Ms Wong praised the Finocchiaro government for its "decisive action".
The Australian Christian Lobby on Wednesday called on the SA government to also ban "biological men" from women's prisons.
But transgender and justice advocacy groups have slammed the move.
Alastair Lawrie, policy and advocacy director at the Justice and Equity Centre, said the NT government's decision to place trans women in men's prisons was discriminatory and wrong.
"Prisoners should be housed in correctional facilities that match their gender identity," he told AAP on Wednesday.
"Trans women are women and should be in women's prisons. Trans men are men and should be in men's prisons."
Prisons managed risk all the time and should do so based on risk, not on gender identity and without political intervention, Mr Lawrie said.
"Prisons have a responsibility to prevent sexual assaults against people in their care and that can and should be done without discrimination."
Mr Lawrie said there was no evidence to support claims that transgender women were more inclined to violence.
"Clearly where a person has a history of sexual violence against women, they shouldn't be placed in a cell with another woman."
Justice Not Jails said trans women housed in male prisons experienced disproportionately high rates of sexual assault and physical violence, plus verbal abuse from prison guards.
Vital Collective, representing the sistergirl, brotherboy and LGBTIQAP+ community, said Ms Finocchiaro had mislabelled trans women as men.
"The chief minister implies that sistergirls and transwomen are somehow inherently more violent," a spokesperson said in a statement.
Such commentary from the chief minister was inaccurate, emboldened anti-trans hatred and increased the risk of violence towards the gender-diverse community, the group said.
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