I received an error while installation of an application with .msi extension. “The System administrator has set policies to prevent this installation“. Below screenshot is popped up from windows installer, even though i am logged on to the PC using local administrator credentials.

System administrator has set policies to prevent this installation
To fix the error, you can follow below steps:
- Disable Anti-Virus and then try to install application again. If it fixes the issue, then try to make an exclusion to make it permanent for future installations.
- Go to Start
-> Type Run -> In the Run box type secpol.msc.
- Right Click on Software Restriction Policies -> New Software Restriction Policies

- Right Click on Enforcement and click Properties.

- Select “All users except local administrators“. Click on OK to exit.

- Set “Turn off Windows Installer” to Never in the Group Policy Computer Configuration > Administrative Templates > Windows Components > Windows Installer.
- Install the application using the .msi installer. It should install this time.
Conclusion
As you have seen in this blog post, we have created a local group policy to fix the error message System administrator has set policies to prevent this installation. If this is an issue on all users devices, you can also create a group policy from active directory domain controller and apply it to all target devices.