The decision sparked an immediate backlash from groups that had demanded bold action against cheating.
But others backed the IOC view, explained by president Thomas Bach, that a historic outright ban would trample the rights of clean Russian athletes hoping to compete.
Individual sports federations will have primary responsibility for determining every Russian athlete's eligibility for Rio, the IOC executive said.
Bach insisted that strict checks put in place for Russians proved the IOC had gotten tough with a country accused of running a vast doping programme.
"In response to the most important moment for clean athletes and the integrity of the Olympic Games, the IOC has refused to take decisive leadership," the USADA boss said in a statement.
Drug Free Sport New Zealand chief executive Graeme Steel blasted the IOC's decision to "pass the hot potato to international federations".
But some of those federations and other sports leaders were pleased with the decision. FINA, global governing body for swimming spoke out ahead of the meeting against blanket ban as did countries like Italy and others closer to Russia.
The Association of National Olympic Committees also backed the IOC, with ANOC president Sheikh Ahmad Al-Fahad Al-Sabah saying an all-out ban "would have unfairly punished many clean athletes".
"ANOC commends the IOC for favouring individual justice over collective responsibility and giving International Federations responsibility to ensure clean competitions in their sports at Rio 2016," he said.
The IOC faced global pressure to act after a World Anti-Doping Agency report last week detailed a cheating programme directed by the Russian sports ministry with help from the FSB state intelligence agency.
Russia's entire track and field squad has already been barred from Rio following a similar WADA report on "state-supported" doping in that sport.
Fourteen national anti-doping agencies -- including the US, Germany and Japan -- as well as several national Olympic committees had demanded Russia's exclusion from Rio.
Others, especially top political leaders in Moscow, insisted collective punishment would be unjust.
"This may not please everybody, but this result is one which is respecting the rules of justice and all the clean athletes all over the world," he said.
Russian sports minister Vitaly Mutko -- a key player in the WADA report who has been banned from Rio -- hailed the IOC's "objective" decision.
Separately, an IOC ethics commission ruled that 800m runner Yuliya Stepanova, who turned whistleblower on doping in Russian athletics, could not go to Rio even as a neutral -- a decision that both WADA and USADA denounced as likely to discourage others from coming forward.
First, athletes must be individually cleared by their respective sports federation and there should be no presumption of innocence.
An expert from the Court of Arbitration for Sport must also approve each individual decision.
Additionally, any athlete who has previously tested positive for doping is ineligible, even if they have already served their suspension. Finally, no athletes named in the WADA report put together by Canadian law professor Richard McLaren is eligible.
But the complex screening process must be carried out for the 387 athletes nominated for Rio by the Russian Olympic Committee (ROC) before the Games start on August 5.
Russians "have to clear the highest hurdles in order to have chance to compete in the Olympic games," he added.
Immediately following the IOC announcement, the International Tennis Federation said eight players already met the eligibility requirements.
Mutko told the R-Sport news agency he was "absolutely sure that the majority of the Russian team will meet the criteria.
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