Durban has been stripped of the 2022 Commonwealth Games after failing to meet key obligations.
A review by the Commonwealth Games Federation (CGF) expressed disappointment the information submitted by the South African city was a "significant departure" from undertakings provided in the original bid.
"In line with the mandate from members at the 2016 General Assembly, the CGF is actively exploring alternative options, including a potential replacement host," said CGF president Louise Martin.
"The CGF will continue to have an open dialogue with the South African Sports Confederation and Olympic Committee and the Republic of South Africa and remains committed to realising the shared ambitions of a future Commonwealth Games in Africa.
"The CGF is fully confident and committed to delivering a successful Commonwealth Games for athletes and fans in 2022."
Durban was awarded the Games in September 2015 after Edmonton withdrew, but last month South African sports minister Fikile Mbalula indicated financial constraints were causing problems.
"We gave it our best shot, but we can't go beyond. If the country says we don't have this money, we can't," he said at the time.
A statement from the CGF explained the rationale for its decision.
"The Commonwealth Games Federation has completed its review of the final information submitted by South Africa on 30th November, 2016 to determine whether their proposals for hosting the 2022 Commonwealth Games are consistent with their original bid commitments and the host city contract," it said.
"It is with disappointment that the detailed review has concluded that there is a significant departure from the undertakings provided in Durban's bid and as a result a number of key obligations and commitments in areas such as governance, venues, funding and risk management/assurance have not been met under the revised proposition."
