Transgender athlete Hannah Mouncey will not be allowed to compete in the national women's football competition, after the AFL declined her request to nominate for the AFLW draft.

The AFL based its decision on the Victorian Equal Opportunity Act, which states that athletes can be discriminated against based on their sex or gender "if strength, stamina or physique is relevant".

Although Mouncey's hormone levels would deem her eligible to compete at the Olympics under IOC regulations, the AFL placed more significance on Victorian law because of the physical nature of the sport.

Mouncey has represented Australia, as a male, in European handball but transitioned to become a woman over the past two years.

At 190cm and 90kg, Mouncey has been playing in the local Canberra women's league, where she's been dominating in the ruck.

There had been expressions of interest from several AFLW clubs.

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