Transgender cyclist Emily Bridges will not race in the women's National Omnium event
The 21-year-old looked set to face some of the sport's biggest names, including five-time Olympic champion Laura Kenny.
However, British Cycling said in a statement on Wednesday: "We have now been informed by the Union Cycliste Internationale (UCI) that under their current guidelines, Emily is not eligible to participate in this event."
Bridges began hormone therapy last year as part of her gender dysphoria treatment and have now become eligible To compete in women's events because of lowered levels of testosterone.
In May 2021, she finished 43rd out of 45 riders in the elite men's criterium at the Loughborough Cycling Festival. In September, she was second to last in the Welsh National Championship road race, a 12km lap behind the winner.
Last month, Bridges won a men's points race at the British Universities Championships in Glasgow - her final men's race.
British Cycling's transgender regulations require riders to have had testosterone levels below five nanomoles per litre for 12 months before the competition.
"We have been in close discussions with the UCI regarding Emily's participation this weekend and have also engaged closely with Emily and her family regarding her transition and involvement in elite competitions," said British Cycling.
"We acknowledge the decision of the UCI with regards to Emily's participation. However, we fully recognise her disappointment with today's decision.
"Transgender and non-binary inclusion are bigger than one race and one athlete - it is a challenge for all elite sports."
BBC Sport has approached UCI for comment about its decision, but the governing body has yet to respond.
Earlier this month, US college transgender swimmer Lia Thomas won the 500-yard freestyle and finished fifth and eighth in other races at the NCAA Championships.
Thomas was backed by an open letter from 300 swimmers, including rival Erica Sullivan - but her inclusion also faced opposition from another competitor, Hungary's Reka Gyorgy, and Florida governor Ron DeSantis.
Asked about the issue, World Athletics president Lord Sebastian Coe claimed the "integrity" of women's sport was at stake, and its future was "fragile".
Coe also called on the International Olympic Committee (IOC) to introduce regulations that can be applied across every sport and insisted "gender cannot trump biology".
British Cycling has also called for a coalition across several sports - involving governing bodies, athletes, the transgender and non-binary athlete community and the government - to "find a better answer".
"We also understand that, in elite sports, the concept of fairness is essential," it said.
"For this reason, British Cycling is today calling for a coalition to share, learn and understand more about how we can achieve fairness in a way that maintains the dignity and respect of all athletes."
Former Great Britain Olympic swimmer Sharron Davies, who has criticised British Cycling for initially allowing Bridges to take part in the women's race, said female cyclists had been "thrown under the PC bus" by the governing body.
"Time for true female athlete equality of opportunities in cycling," she tweeted. "Find better ways of being inclusive (which we all want)."
Labour MP Tonia Antoniazzi, speaking in the House of Commons earlier on Wednesday, said the Government needed "urgent conversations" with British Cycling about their policy of transgender inclusion.
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