A replacement host for the men's event, scheduled to be held in New Delhi from December 3 to 11, is expected to be named within a week, the International Hockey Federation (FIH) said in a statement.
"We regret that we have to move the Champions Trophy from India," FIH president Leandro Negre said.
"It is difficult for teams, organisers and the fans. But we feel that this is the only way to maintain the integrity of our sport."
India will also lose its place in the eight-nation competition, with the last berth to be decided by the FIH.
India and Pakistan were given wildcards for this year's tournament which features the world's top-ranked teams - Australia, England, Spain, Germany, South Korea and the Netherlands.
India have, however, been invited to participate in the Champions Challenge tournament contested by teams not playing in the Champions Trophy, to be held in South Africa in November.
The schedule and line-up of the Champions Trophy will be determined when the host nation is named, but the event will take place during the same December 3-11 period, the FIH said.
The FIH had voiced concerns in July over a sports ministry-brokered settlement between two rival bodies, Hockey India (HI) and the Indian Hockey Federation (IHF), which agreed to form a joint executive board to run the game.
The FIH said there could be only one governing body for the sport in any country that had the exclusive authority and responsibility to govern, organise national competitions and to enter national teams in international events.
"It is a fundamental and non-negotiable requirement of the Olympic Charter and the FIH statutes," the world governing body said.
The FIH added it would continue to monitor the governance structure in India and hoped that a resolution could be found before it begins to affect future events to be held in India.
New Delhi is scheduled to host the Olympic qualifiers for men and women in February.
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Shukaaaaaaaaar...
where is ashok sai :P