This is essentially what they already do for DSD athletes, but some sports governing bodies (IAAF & FINA for T&F and swimming, respectively) have taken the extra step and declared if you go through puberty as a male, you cannot compete as a female down the road, even if you are suppressing T levels to the normal female range.
I think you are on track with the idea of a separate division...perhaps it is not perfect, but there is just not a perfect solution to be found in this case. Make a decision, be honest about the pros and cons, don't be an asshole, and move forward.