The 70 nations and territories in attendance voted 43 to 27 for the Australian bid.
The decision came after last year's Games in New Delhi, supposed to showcase India's status as an emerging global power, instead descended into a welter of embarrassing scandals.
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"My sincere congratulations to Gold Coast -- theirs was a fantastic bid and they are a very, very worthy winner," federation president Michael Fennell said.
Coastal Hambantota was badly affected by the 2004 Indian Ocean tsunami and had brought in cricket legend Muttiah Muralitharan to boost its campaign message that hosting the Games would have helped regenerate Sri Lanka.
Fennell said he hoped Hambantota would consider bidding again in the future.
"Hambantota was also a very strong bid, and we have a duty to take the Games to new places, but the bid needs to be th