The Pacific Games Council says it will formally terminate the host agreement with Tonga for the 2019 Pacific Games, after the deadline passed for the Tongan Government to recommit its support.
The Government pulled its backing for the Games at the end of May, citing financial reasons.
The Pacific Games Council gave them until the end of June to address their concerns and said if there was no change in stance they would begin proceedings to seek damages through the court.
But the Prime Minister, 'Akilisi Pohiva, said the decision was final and his government wanted to focus its resources on more important areas of economic development.
The Pacific Games Council said with the deadline having passed they will now terminate the host agreement and ramp up the search for a new host for the 2019 event.
The Council said it sincerely regreted the "missed opportunity for Tonga's own athletes and for the wider Tongan community - its business sector, social institutions, and most especially, its youth".
The PGC also thanked the Tongan Olympic Committee and local Games Organising Committee for their efforts to keep the 2019 Games in Tonga.
Expressions of Interest from Pacific Games Associations wishing to host the Games are due by the end of July, with the Council's Executive Board intending to recommend an alternative host by the end of August.
The Fiji Olympic Committee has already ruled itself out of contention, saying two years is too short a timeframe for it to host the Games.
But Samoa's Prime Minister, Tuila'epa Sa'ilele Malielegaoi, said in May his country always stood ready to host international sporting events because of the capabilities and the quality of sporting facilities constructed for the 2007 Pacific Games.