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Chandimal, 29, was replaced by Dimuth Karunaratne, Sri Lanka Cricket said, listing a 17-member squad that did not include the right-handed batsman.
National selectors said in a statement Chandimal was dismissed to help him "regain his form and be ready for future international tours."
His sudden sacking came a day after he insisted his team could lift their game during their upcoming tour against South Africa, following a thrashing by Australia.
Under Chandimal, Sri Lanka lost the opening day-night Test in Brisbane by an innings and 40 runs inside three days and followed it up with a 366-run thrashing in the Canberra Test.