The decision to terminate Pune, owned by Sahara, would leave the IPL an eight-team affair for the time being.
"Given Sahara's continued position that it would not deliver the bank guarantee, the Working Committee unanimously determined to terminate the Sahara franchise agreement while taking whatever action was necessary to protect the BCCI position," BCCI Secretary Sanjay Patel said in a statement after the meeting here.
The Board said Sahara was due to furnish the guarantee of Rs 170.2 crore in March this year but has failed to do so despite five reminders.
"The BCCI Working Committee today discussed the situation regarding default by Sahara Adventure Sports (Sahara) in not submitting the bank guarantee for the the Pune franchise of IPL for the 2014," the statement read.
"As per terms of this franchise agreement this bank guarantee was due for delivery in March 2013, more than six months ago.
"Over the last six months, the BCCIs advisors have written to Sahara on five separate occasions (in April, May, June, August and October) requesting that the bank guarantee be put in place, with the final letter being sent on October 8, 2013," it added.
The Pune Warriors have been on collision course with the BCCI after the Board encashed its bank guarantee for the 2013 season due to non-payment of franchise fee.
After that, Sahara announced its pull-out from the IPL even though it is yet to formally convey this to the BCCI. Sahara has been demanding the completion of the arbitration proceedings on the issue of franchise fee, which, it feels, should be lowered since the BCCI did not deliver on its promised number of IPL matches for the team.
The arbitration process has not yet started because of the differences between BCCI and Sahara over the judges to be appointed for it.
The BCCI said the pending proceedings could not come in the way of termination.
"In August 2013 and pending arbitration, Sahara moved the Honourable Bombay High Court, seeking an injunction on the BCCI's rights to terminate the franchise agreement as a result of Sahara's default in not delivering the bank guarantee," the BCCI said.
"In its order of September 5, 2013, the High Court has concluded that only if Sahara gave the bank guarantee as required by the franchise agreement, could BCCI not terminate the agreement," it explained.
"In response, Sahara again refused to put in place the guarantee as per the franchise agreement."
IPL governing council members were also present in today's working committee meeting where the Board decided to terminate the contract of Pune Warriors.
The BCCI said the termination of Sahara was required to start the preparations for the next IPL season.
"In order to proceed with the preparation for the 2014 season, it is important that the BCCI now has certainty as to whether the Pune franchise will comply with the terms of its franchise agreement," the BCCI said.
Pune, bought by Sahara for USD 370 million (approx Rs 1702 crore) in 2010, was the most expensive franchise on the IPL roster and its termination would cause substantial financial loss to the BCCI.