Birmingham and Liverpool went head to head for the 2022 Commonwealth Games on Monday after Durban was all but stripped of the event.
"The CGF 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‚" the CGF said in a statement.
Reports had suggested that the CGF was weighing up its options and that a decision was expected this week, but on Monday afternoon reports across the country began calling the news.
It had been estimated that staging the Games in Africa for the first time would have cost at least ZAR8 billion (£498 million/$607 million/€567 million).
The Commonwealth Games began as the British Empire Games in 1930.
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Liverpool have already said publicly they are willing to step in.
Since then, however, they had not formed an Organising Committee or made any of the payments due to the CGF.
Melbourne and other Australian cities are also believed to have expressed an interest.
The news came as Queen Elizabeth launched the baton relay for the 2018 Commonwealth Games, which will take place on Australia's Gold Coast.
Sports minister Fikile Mbalula had earlier said at a media briefing, "I don't want to raise your expectations and say everything looks good, it doesn't because we don't agree on the fundamentals and that is the operational budget".