The venue for the 15th Super rugby team will be decided in arbitration after tournament organisers failed to reach a unanimous decision Wednesday.
The executive committee of SANZAR, which comprises the South Africa, New Zealand and Australian rugby unions, was considered unlikely to agree unanimously, given both Australia and South Africa had submitted bids to host the new team from 2011.
SANZAR said in a statement that it would move quickly to set up an independent arbitration process.
Australia is promoting Melbourne and South Africa's bid is the Southern Kings from Eastern Cape Province.
South Africa and New Zealand each have five teams in Super 14 and Australia has four. The 2011 tournament will be divided into three five-team conferences.
AP