With Australia refusing to tour Pakistan citing security concerns, the cricket-starved nation has been forced to shift their April-May five-match one-day series to a neutral venue.
Pakistan Cricket Board chairman Ejaz Butt held talks with Cricket Australia officials in Melbourne and the decision was made there.
PCB sources said Butt was invited to hold talks with CA chief executive James Sutherland.
It was agreed that the one-day series and a Twenty20 game would be played from the last week of April.
"Basically it has been agreed in principle that Pakistan would host the series at neutral venues like Abu Dhabi, Dubai and Sharjah," a source said.
"So the series is on, but not in Pakistan," he added.
He said CA officials had made it clear to Butt that the security briefings they got from different sources made it impossible for the Australian team to travel to Pakistan because of security concerns.
Butt will release details of the itinerary next week once he returns later this week.
Australia hasn't toured Pakistan since 1998 and the two countries have not played a bilateral series since 2005.
Former players and officials have lambasted the PCB for agreeing to play at neutral venues. They see this is as one of the reasons why the ICC eventually relocated the Champions Trophy from Pakistan.