The use of men's and women's toilets at work and in places like shops and hospitals should be based on biological sex - but trans people will also need facilities, the equalities watchdog has said.
It comes after a landmark judgment earlier this month on how a woman should be defined in law.
The UK Supreme Court declared on 16 April that the words "woman" and "sex" in the Equality Act 2010 refer to a biological woman and biological sex.
The appeal case was brought against the Scottish government by campaign group For Women Scotland (FWS) following unsuccessful challenges at the Court of Session in Edinburgh.
The Supreme Court judgment has been interpreted to mean that trans women, who are biologically male but identify as women, can be excluded from women-only spaces like toilets and changing rooms.
But the ruling has caused consternation among some politicians and thousands of people protested in central London on 19 April against what they said was a "betrayal" of the trans community.
Interim guidance has now been issued by the Equality and Human Rights Commission (EHRC) because "many people have questions about the judgment and what it means for them".
The watchdog is working on a more detailed code of practice, which it said it is aiming to provide to the government for ministerial approval by June.
No plans for 'toilet police'
Meanwhile, Cabinet Office minister Pat McFadden has suggested ministers have no plans for "toilet police" in the wake of the Supreme Court ruling.
But he also acknowledged the government will have to change its practices following the judgment.
The EHRC has said trans women "should not be permitted to use the women's facilities" in workplaces or public-facing services like shops and hospitals.
It said the same applies to trans men, who are biologically female, using men's toilets.
However, trans people "should not be put in a position where there are no facilities for them to use", the watchdog also insisted.
What else has the watchdog guidance said?
According to the new guidance, schools must provide single-sex changing facilities for boys and girls over the age of eight.
"Suitable alternative provisions may be required" for trans pupils, the watchdog said.
It added that trans girls "should not be permitted to use the girls' toilet or changing facilities, and pupils who identify as trans boys (biological girls) should not be permitted to use the boys' toilet or changing facilities".
Sports clubs and other associations of 25 or more people are allowed to be exclusively for biological men or women, the watchdog also said.
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Sir Keir Starmer, who previously said "transwomen are women", welcomed the Supreme Court ruling and said the judgment provided "clarity" that "a woman is an adult female".
The prime minister also said public services now needed to ensure their guidance was "in the right place according to that judgment".
Mr McFadden was asked by the BBC's Sunday with Laura Kuenssberg what steps the government would take following the ruling and new interim guidance from the EHRC on the matter.
He told the BBC: "Well, we will all have to react to the court judgment and the guidance from the EHRC that you said, but, yes, that's the logical consequence of the judgment and the guidance that's come out - that people use the facilities of their biological sex.
"That's what the court said and that's what the guidance has said."
Asked if it meant transgender people would be banned from using the toilets of the gender they identify as, Mr McFadden said: "Look, in reality, when you say ban, am I going to be standing outside toilets? I'm probably not.
"There isn't going to be toilet police. But that is the logical consequence of the court ruling and the EHRC guidance."
Meanwhile, Conservative leader Kemi Badenoch has called for a "clear, medically supervised process" for transitioning, rather than people self-identifying as transgender.
Her comments come days after she clashed with Sir Keir on the issue and accused Labour ministers of lying about support for female-only spaces following Sir Keir's U-turn on his views about transgender women.
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