The governing body says all transgender athletes should be allowed to compete with men in an open category.
Chair Ian Beattie said the governing body wanted athletics to be a "welcoming environment for all", but added it had a responsibility to "ensure fairness" in women's competition.
However, the Equality and Human Rights Commission (EHRC) said it was "disappointed" UKA chose to publicise "inaccurate advice" and questioned its interpretation of the Equality Act 2010.
UKA disagrees with the use of testosterone suppression for transgender women, saying there is "currently no scientifically robust, independent research showing that all male performance advantage is eliminated".
UKA added it has seen "no evidence that it is safe for transgender women to reduce their hormonal levels by testosterone suppression", and that there is "insufficient research to understand the effects on transgender women if such testosterone suppression is carried out suddenly".
Therefore it would instead like to reserve the female category for those who were recorded female at birth and have not undergone transition.
UKA does not believe the 'sporting exemption' introduced in the Equality Act 2010 allows them to lawfully exclude transgender women in possession of a Gender Recognition Certificate from competing.
However, the UK government disagrees with UK Athletics' stance that the law does not allow it to ban transgender women from female events on fairness grounds.
It believes the 2010 Equality Act does allow sports to protect the female category by putting restrictions on the participation of transgender athletes.
The EHRC agreed, citing section 195 of the act,which relates to sport.
It states that sporting organisations have an exemption to discriminate on grounds of sex in a "gender-affected activity" and discriminate on grounds of gender reassignment where necessary to secure "fair competition" or "the safety of competitors".
Responding to the UKA statement on Friday, the EHRC said it is "therefore likely to be lawful for a sporting body or organisation to adopt a trans exclusive policy in relation to gender-based sporting competition where they can evidence that it is necessary to do so in order to secure fair competition or the safety of competitors".
"We reached out to UK Athletics and offered to discuss the legal advice underpinning their statement," it added.
"We are disappointed that they have chosen to publicise their inaccurate advice and we would urge all organisations to consult our website which explains equality law and how it relates to these issues."
It is the latest development in a series of sports debating, reviewing and adjusting their transgender inclusion policies.
Last year, British Triathlon became the first British sporting body to establish a new 'open' category in which transgender athletes can compete.
UKA's stance contrasts with that of World Athletics, which has proposed continuing to allow transgender women to compete in female international track and field events.
The world governing body has said its "preferred option" was to tighten the sport's eligibility rules, but still use testosterone limits as the basis for inclusion.
A policy document suggesting the amendments to its transgender inclusion policy has been sent to World Athletics' member federations as part of a consultation process before a vote next month.
LGBTQ+ charity Stonewall said it was "vital" that sports use "robust evidence from the actual practice and experience of their sports, when seeking to update inclusion and participation policies".
Stonewall director of communications Robbie de Santos added: "The scientific evidence base on trans people in sport is developing but is far from conclusive."
According to 2021 census data, 0.1% of the population of England and Wales identified as transgender men, with the same number identifying as transgender women.
De Santos said that although the transgender population "may be small" they have "every right" to participate in and enjoy the benefits of sport.
A Fair Play for Women spokesperson said they were "pleased" by UK Athletics' call for a change in legislation.
"Categories are how we make sport inclusive," they said.
"Categories in sport work by keeping people out, not by letting people choose what category they want to be in.
"Open and female options means there is a place for everyone," they added, citing a 2021 report from the Sports Councils Equality Group (SCEG) that suggested adding 'open' and 'universal' categories to improve transgender inclusion in sport.
UKA chair Beattie said: "We would appeal to all those engaged in this discussion online to share their thoughts in a way that is respectful of the differing opinions and sensitive nature of the debate."
Last week, British shot putter Amelia Strickler claimed World Athletic's revised rules "would leave women at a serious disadvantage", while long-distance runner Eilish McColgan said "a lot more work needs to be done" around the possible advantages of transgender women competing in elite female athletics.
Other sports have banned transgender women from participating in elite female competition if they have gone through any part of the process of male puberty amid concerns they have an unfair advantage.
In June 2022, World Athletics president Lord Coe welcomed the move by Fina - swimming's world governing body - to stop transgender athletes from competing in women's elite races if they had gone through any part of the process of male puberty, insisting "fairness is non-negotiable".
Fina's decision followed a report by a taskforce of leading figures from the world of medicine, law and sport which said that going through male puberty meant transgender women retained a "relative performance advantage over biological females", even after medication to reduce testosterone.
Fina also aimed to establish an 'open' category at competitions for swimmers whose gender identity is different than their sex recorded at birth.
While such moves have been praised for protecting female sport, some critics have said these rules are discriminatory.
Olympic diving champion Tom Daley was "furious" at Fina's approach, saying: "Anyone that's told that they can't compete or can't do something they love just because of who they are, it's not on."
US winger and two-time World Cup winner Megan Rapinoe also criticised
the exclusion of transgender women in some sports.
The Rugby Football League and Rugby Football Union also banned transgender women from competing in female-only forms of their games.
It followed World Rugby becoming the first international sports federation to say transgender women cannot compete at the elite and international level of the women's game in 2020.