Cricket Australia chief executive James Sutherland gave a press conference in Johannesburg to announce the latest developments
Smith, Warner, Bancroft sent home from South Africa but Lehmann stays on as Australia coach
Australia captain Steve Smith, vice-captain David Warner, and batsman Cameron Bancroft have been sent home from the tour of South Africa for their part in the ball-tampering incident that has engulfed cricket.
While the three players could face "significant sanctions", as described by Cricket Australia (CA) chief executive James Sutherland, coach Darren Lehmann will remain in his position, despite widespread media reports that claimed he was expected to hand in his resignation.
Bancroft was caught on camera during Day 3 of the third Test against South Africa in Cape Town attempting to manipulate the ball with sticky tape. Smith and Bancroft faced the media at the end of the day's play, with Smith admitting a "leadership group" had decided during the lunch break to tamper with the ball.
Sutherland said during his press conference in Johannesburg on Tuesday that CA's investigation concluded that the leadership group only comprised Smith, Bancroft and Warner. As such, Lehmann was excused of any blame and would continue as coach of the team.
"I want to apologise to all Australians for what took place," Sutherland said. "It's about the reputation and integrity of Australian cricket and Australian sport and whether Australians can take pride in their national team.
"The key finding is that prior knowledge of the ball-tampering incident was limited to three players - captain Steve Smith, vice-captain David Warner and Cameron Bancroft.
"The three players on report, we are contemplating significant sanctions, which will reflect the gravity of what has occurred and the damage it has done to the standing of Australian cricket."
Sutherland confirmed that Tim Paine, who stepped in to replace Smith as captain after he was stood down on the fourth day of the Newlands Test, has been handed the Australia captaincy.
"This issue goes beyond the technical nature of the offences and various codes of conduct. It is about the integrity and reputation of Australian Cricket and Australian sport.
"Ultimately, it is about whether Australians can feel proud of their national sporting teams.
"That depends as much on the way the players conduct themselves, as it does about winning or losing. It is about how we play the game."
Bancroft, Smith and Warner will all be sent home ahead of the fourth and final Test of the series, with wicketkeeper Tim Paine appointed as captain.
"No other players or support staff had prior knowledge and this includes Darren Lehmann, who despite inaccurate media reports has not resigned from his position. He will continue to coach the Australia men's team under his current contract.
"Once the investigation has concluded in the next 24 hours sanctions will be announced. All three players who have been reported will leave South Africa tomorrow.
"Tim Paine has been officially appointed captain of the Australian men's Test team."
A statement on Cricket Australia's website announced that Smith had been stripped of the captaincy for "at least the final Test in South Africa", with Paine "endorsed by the board as his successor and Australia's 46th Test captain".
Matthew Renshaw, Joe Burns and Glenn Maxwell have been called into the squad for the fourth Test to replace Smith, Warner and Bancroft.
Asked whether he believed the ball-tampering to be an isolated incident, Sutherland said: "The feeling from Iain [Roy, Cricket Australia's head of integrity] in his review is that it's an isolated incident, but again there are things that I don't want to go into too much detail around right now.
"I certainly hope it's an isolated incident, but it's certainly one of significant concern.
"This is not in the laws of the game, it is not in the spirit of the game and I am angry and disappointed. It is not a good day for Australian cricket."