Milan-Cortina chief Giovanni Malago told the International Olympic Committee Session in Mumbai his organisation had been effectively ordered by the Italian government to move the bobsleigh, luge and skeleton competitions to a new site following an estimated doubling of costs for the Cortina track to 80 million euros (£69m).
"As you know, this venue has been at the centre of a long and controversial process," Malago, also the president of Italy's National Olympic Committee, told the session.
"Since the spring, a public tender procedure has been under way, going through different stages."
He said recent global financial trouble "has forced a reflection on the resources originally allocated by the Italian government".
"As a result, Milano-Cortina 2026 has identified another venue outside Italy. We are already working to explore all possible solutions and analyse the alternatives together with the IOC and international federations before submitting the choice to our board for final approval."
Despite the change of plans, the organising committee president insisted "Italy is ready" to stage the Games, scheduled for February 6th to 22nd, 2026, followed by the Paralympics from March 6th to 15th.
"The responsibility not to build the sliding centre is not from the organising committee but from the (Italian) government itself," he told reporters.
"Our responsibility is to conduct the Games. And I think we will do very, very well."
Innsbruck in Austria, one of the nearest possible alternatives, has been suggested as a venue for the 2026 sliding events but no decision has yet been made.
'Dismayed'
Flavio Roda, the president of Italy's Winters Sports Federation (FISI), said that he was "dismayed" by Malago's announcement, which means "the foundations for building the athletes of the future will be lost".
"The reasoning of elevated costs isn't sufficient to explain such a serious decision," said Roda in a statement.
"In Italy we don't have a single artificial track where teams can train, our athletes are forced to go abroad. I believe this is the final act, one that is destined to destroy the sliding sports movement in Italy."
But Andrea Varnier, chief executive of the organising committee, said: "It's a sensible decision. (Regarding) sliding centres, there are not so many working and operating currently.
"So we are evaluating all possibilities because it's not just about moving competition, it's much more than that. It's the Olympic Games, so there's a lot of implications."
IOC co-ordination commission chair Kristin Kloster Aasen welcomed a move that was in line with an IOC policy to avoid building Games venues without a clear legacy plan.
"This responsible commitment reinforces the position of the IOC that this venue needed to be reconsidered as the permanent legacy was not clear," she said.
