Sri Lanka has been stripped of the Under-19 World Cup next year, the International Cricket Council said Tuesday, after suspending the island nation's board over alleged political meddling.

The tournament will now be held in South Africa, the game's governing body said following a meeting of its board in the Indian city of Ahmedabad.

The 16-nation tournament is scheduled to be held from January 13 to February 4.

As a result of losing the right to host the competition, Sri Lanka stands to lose a $2.4 million grant from the ICC to develop venues, the local cricket board has claimed.

The ICC suspended Sri Lanka Cricket (SLC) earlier this month, saying it had failed to ensure there was no government interference in its affairs.

Sri Lanka can continue to compete internationally but funding to SLC will be controlled by the ICC.

The suspension came after Sri Lanka's parliament asked the board to resign over allegations made by sports minister Roshan Ranasinghe that it had syphoned off millions of dollars.

The ICC has rules against political interference and has suspended Sri Lanka before.

Sri Lanka Cricket said the loss of the U-19 tournament was a "big blow" to the morale of young players, and a substantial financial loss to the country.

"This decision is something that makes the entire nation sad," the board's assistant secretary Krishantha Kapuwatte told reporters in Colombo.

"We have been working diligently in the past four months to prepare our venues for the tournament".