The trust running the hospital has ordered its own report into problems
Post-mortem examinations have been suspended at Wales' biggest hospital after inspectors found major problems.
The Human Tissue Authority (HTA) highlighted problems in procedures, facilities and equipment at University Hospital of Wales (UHW) in Cardiff.
The HTA said it did not take such action lightly, and Conservatives called it an "extreme step".
Cardiff and Vale NHS Trust set up an urgent inquiry and said it would take immediate action on recommendations.
The examinations will now take place at other facilities.
The examinations at UHW's mortuary were halted last Thursday after its licence was suspended by the HTA.
The HTA said two licences were suspended after an inspection last month showed poor compliance with regulatory standards.
Director of Regulation Sandy Mather said: "The nature of mortuary work means that should something go wrong, it has the potential to cause significant distress to those involved.
"It is therefore essential that establishments comply with HTA regulatory requirements.
"We have been in dialogue with the chief executive and other senior members of staff at the hospital since the inspection and we are confident they understand the serious nature of this action.
"We do not take regulatory action of this seriousness lightly, but feel, in this case, action is in the public interest."
Jan Williams, who became the trust chief executive in July, said: "I am disappointed to come in and find myself in receipt of the HTA report.
"It highlights serious shortcomings in the operating policies and procedures, premises, facilities and equipment in place in the UHW mortuary.
"I accept fully the report's findings and recommendations and have taken immediate action to ensure that we address the concerns raised swiftly so that our licence suspension can be lifted as soon as possible.
"In addition, I have set up an urgent inquiry into the circumstances that led to the HTA decision, to be conducted by Healthcare Inspectorate Wales (HIW).
"I will also implement HIW's recommendations once they become available. I am also working closely with the HTA team to ensure our return to full compliance with the HTA standards.
"I want to assure people that I take this matter seriously and understand that any discussion of mortuary and post-mortem facilities can cause distress, particularly to people who are recently bereaved."
Ms Williams said the examinations would be carried out at other locations, including Llandough hospital, which is part of Cardiff and Vale NHS Trust.
The trust board is to discuss a progress report at its meeting on 3 September.
Welsh Conservative health spokesman Andrew RT Davies said the problems were "another blow to staff morale and patient confidence".
He said: "Transferring bodies is not only putting pressure on other hospitals but is also extremely distressing for bereaved families.
"This once again calls into question people's confidence in the service made available by Cardiff and Vale NHS Trust.
"Whatever the problems are at the mortuary they need to be rectified as soon as possible."
The Welsh Assembly Government said it expected the trust to address immediately all the concerns raised so it could regain the licence for mortuary facilities.
An assembly government spokesperson said: "The assembly government will consider carefully HIW's report once available before considering what further action to take against the trust.
"Officials within Welsh Assembly Government have invested a considerable amount of time, working with the Human Tissue Authority and trusts, to ensure that they were prepared for, and understood, the requirements of the Human Tissue Act, including identifying a lead co-coordinator within each organisation."