The rule, issued in July as part of efforts to better manage a severely limited supply of human organs, says Chinese citizens should take priority when carrying out transplants.
"We strictly supervise and control hospitals that are authorised to perform organ transplants and we monitor every transplant they carry out," Mao Qun'an, spokesman of the ministry, told reporters at a briefing.
Around 1.5 million patients in China need organ transplants each year, but only 10,000 can find organs, government statistics show.
According to the rule, hospitals who violate the new regulations will be punished severely and could even have their transplant surgery licences revoked.
The ban on foreigners is part of broader regulatory measures which took effect from May 1, prohibiting all trading in human organs in any form.