India have called off next month's tour of Pakistan, the government refusing permission amid simmering tension between the nuclear-armed neighbours over the militant attacks in Mumbai in November.
"We have received a letter from the government that the tour is not feasible under the prevailing circumstances," Board of Control for Cricket in India (BCCI) chief operating officer Ratnakar Shetty told Reuters.
A senior Pakistan Cricket Board (PCB) official said an official invitation had already been sent to Sri Lanka to play three tests, three one-dayers and a Twenty20 match to replace the cancelled tour.
"It is disappointing for us but we were expecting this," PCB chief operating officer Salim Altaf told reporters in Lahore.
"We believe cricket can help improve relations between the two nations."
The decision to withdraw from the tour, which was due to involve three tests, five one-day games and a Twenty20 international, will raise concerns over the 2011 World Cup to be staged by India, Pakistan, Sri Lanka and Bangladesh.
However, Shetty said: "It is too early to draw any conclusions on an event that is three years away."
Improving ties between the two neighbours suddenly dipped when India blamed Islamist militants based in Pakistan for the attacks in Mumbai which killed at least 179 people.
Any hopes of the Jan. 13-Feb. 19 tour going ahead seemed to disappear when federal sports minister Manohar Singh Gill opposed the trip earlier this month.
Political commentators said Thursday's decision would further harm relations between India and Pakistan.
"India is reducing its contact with Pakistan and the cricket tour had to be the first casualty," political analyst Amulya Ganguli told Reuters. "There is no immediate chance of any improvement of relations between the two countries now."
Others thought the trip should have proceeded.
"I wish the tour had gone ahead as it could have generated some goodwill at a time when it is needed the most," said political commentator Kuldip Nayar.
U.S. and British officials have joined New Delhi in calling on Pakistan to do more to stamp out militant groups such as Lashkar-e-Taiba, which they blame for the Mumbai attacks, from operating on its soil.
They have also urged restraint from India in its response to the attack and offered help in investigations as well as in the fight against militancy in both countries, which have fought three wars since independence from Britain in 1947.
Political tensions have forced the cancellation of previous series between the neighbours.
In 2004, India toured Pakistan for a full series for the first time in almost 15 years following a thaw in tensions.
The Indians went on to clinch their first test-series win on Pakistan soil.