US President Donald Trump signed an executive order on Wednesday seeking to ban transgender athletes from participating in women's sports, in his latest move targeting transgender people since returning to office.

"From now on women's sports will be only for women," Trump said before he signed the order at the White House, surrounded by dozens of children and female athletes.

"With this executive order the war on women's sports is over."

Top Republicans including US House Speaker Mike Johnson and firebrand Congresswoman Marjorie Taylor Greene were among those in the audience to watch the signing ceremony.

"We will defend the proud tradition of female athletes, and we will not allow men to beat up, injure and cheat our women and our girls," Trump added to applause and cheers.

Trump's order allows US government agencies to deny funds to schools that allow transgender athletes to compete on women's teams.

"If you let men take over women's sports teams or invade your locker rooms, you will be investigated... and risk your federal funding," Trump said.

Trump said he would now push the International Olympic Committee (IOC) to change its rules on transgender athletes before the 2028 Los Angeles Games. (AFP)