  With the full data sample of $772 \times 10^6$ $B{\bar B}$ pairs recorded by
the Belle detector at the KEKB electron-positron collider, the decay $\bar{B}
\rightarrow D^* \tau^- \bar{\nu}_\tau$ is studied with the hadronic $\tau$
decays $\tau^- \rightarrow \pi^- \nu_\tau$ and $\tau^- \rightarrow \rho^-
\nu_\tau$. The $\tau$ polarization $P_\tau(D^*)$ in two-body hadronic $\tau$
decays is measured, as well as the ratio of the branching fractions $R(D^{*}) =
\mathcal{B}(\bar {B} \rightarrow D^* \tau^- \bar{\nu}_\tau) /
\mathcal{B}(\bar{B} \rightarrow D^* \ell^- \bar{\nu}_\ell)$, where $\ell^-$
denotes an electron or a muon. Our results, $P_\tau(D^*) = -0.38 \pm 0.51 {\rm
(stat)} ^{+0.21}_{-0.16} {\rm (syst)}$ and $R(D^*) = 0.270 \pm 0.035{\rm
(stat)} ^{+0.028}_{-0.025}{\rm (syst)}$, are consistent with the theoretical
predictions of the Standard Model. The polarization values of $P_\tau(D^*) >
+0.5$ are excluded at the 90\% confidence level.
