The 21-year-old South African Pistorius, known as the "Bladerunner", had both of his legs amputated below the knee when he was 11-months old due to a congenital disorder. He runs on specially adapted carbon fibre blades.
He has won a number of paralympic titles at 400m and set world records on 19 separate occasions regularly challenging the times set by top-level able-bodied athletes.
But a scientific investigation into his springy prosthetics carried out by the Institute of Biomechanics at Cologne University in Germany last November found that they gave him a clear competitive edge over such athletes.
The results of these tests were handed over to Lamine Diack, the president of the IAAF, last week and he asked his 27-member executive council to make a ruling.
A statement from the IAAF said that the Cologne tests had involved comparing the running efforts of Pistorius against that of five able-bodied athletes who are capable of similar levels of performance at 400m.
The IAAF statement read: "Pistorius was able to run with his prosthetic blades at the same speed as the able-bodied sprinters with about 25 per cent less energy expenditure.
"As soon as a given speed is reached, running with the prosthetics needs less additional energy than running with natural limbs.
"The IAAF council has been able to review the full report and has decided that the prosthetic blades known as 'cheetahs' should be considered as technical aids in clear contravention of IAAF Rule 144.2."
Pistorius has already taken part in major IAAF-sanctioned events such as last July's Golden League meeting in Rome.
He has made it clear that his dream was to compete at this summer's Beijing Olympics, possibly in the South African 4x400m relay team.
The South African denies he gains an unfair advantage over his rivals and he has already said that he will contest any ban imposed by the IAAF on his racing activities.
"I feel that it is my responsibility, on behalf of other disabled athletes, to stand firm," he said.
"I will appeal [against] this decision at the highest levels, while also continuing with my quest to race in the Paralympic Games and hopefully the Olympic Games."
Pistorius, currently studying business management at Pretoria University, embarked on his running career only three years ago while jogging during his recuperation process after breaking a knee in a rugby match.
His running blades are made in Iceland at a cost of $17,800.