The match was initially scheduled to be held at the Pallekele stadium in Kandy.
The decision is due to Sri Lanka Cricket being unable to book an appropriate hotel in Kandy for the Sri Lankan team, sources say.
SLC has failed to pay the hotel in Kandy which is usual booked for accommodation for foreign tours and in this backdrop, the hotel has refused to make the reservation.
Although it was planned to book a hotel in Dambulla, the players have refused to travel such a distance everyday through the duration of the Test match.
Critics say that this is due to a person lacking the expertise in the field, being appointed as Sports minister.