The decision was one of several taken by the ICC including barring post-puberty birth males playing women's internationals and a stop clock trial to speed up over rates.
Sri Lanka's membership of the ICC was suspended with immediate effect for government interference on November 10, after the island nation's ministry of sport dismissed the board of Sri Lanka Cricket (SLC) and replaced it with an interim committee.
This followed the country's poor performance at this year's World Cup but the sacking was stayed by Sri Lanka's Court of Appeal.
"After hearing representation from SLC, the ICC Board decided that Sri Lanka can continue to compete internationally both in bilateral cricket and ICC events after being suspended recently for breaching its obligations as a Member in particular the requirement to manage its affairs autonomously and without government interference," the ICC said on Tuesday.
"However, funding to SLC will be controlled by the ICC and the ICC Board confirmed Sri Lanka will no longer host the ICC U19 Men's Cricket World Cup 2024, which will now be held in South Africa."
The 16-nation tournament is scheduled to start on January 13 with Australia drawn with Sri Lanka, Zimbabwe and Namibia in the first round group stage.
Sri Lanka are due to tour England for a three-Test series starting in August but have no other fixtures scheduled in red or white-ball cricket.
The ICC also approved new gender eligibility regulations whereby any male or female participant who have been through any form of male puberty will not be allowed participate in the international women's game.
A stop clock is to be introduced on a trial basis in men's ODI and T20I cricket from December 2023 to April 2024, which will be used to regulate the amount of time taken between overs.
If the bowling team is not ready to bowl the next over within 60 seconds of the previous over being completed, a five-run penalty will be imposed the third time it happens in an innings.
