Our strategic goal is to have six strong franchises covering the whole of South Africa
The Southern Kings will replace the Lions as one of five South African franchises in Super Rugby next year.
After months of haggling and postponed meetings the South African Rugby Union on Thursday confirmed that the Southern Cape-based Kings will join the Stormers, Bulls, Sharks and Cheetahs in the SA conference.
The Lions will sit out of the 2013 Super Rugby season and will play in a promotion/relegation match - against the last-placed SA team - for a spot in the 2014 competition.
The promotion/relegation series will also be in place at the end of 2014, for a place in the 2015 competition - at which point the broadcast contract expires.
SARU, at a general meeting of the member provinces on Thursday, accepted the proposal first tabled by the Executive Council in January.
The proposal was that: "The franchise occupying the lowest log position of the five franchises at the end of 2012 would be relegated."
"All rugby provinces have been consistently in support of the need for an Eastern Cape team in the Super Rugby competition," said SARU President Oregan Hoskins.
"That decision was first taken in 2005, but their inclusion has twice been postponed.
"We made a commitment to the Kings to include them in 2013 and rugby has delivered on that commitment.
"The franchise represents more clubs than any other region - apart from the Stormers - and contains numerous leading rugby schools.
"It has been starved of top-class rugby competition for a decade and a half and now it has the chance to show what it can do."
Hoskins said that SANZAR’s decision to grant the 15th franchise to Melbourne in 2011 - rather than the Southern Kings - had created a dilemma for SARU.
He said that the organisation and players had wanted a "rugby solution" to accommodate six franchises in five places and this had been delivered, as challenging as it was for the relegated team.
"The provinces asked for a rugby solution and we believe that this was the fairest and most transparent method to respond to what is undoubtedly a less than ideal situation," he said.
"We also canvassed Super Rugby players before the start of the season, through the Players’ Association, and this was their preferred mechanism.
"We will continue to push the case for early expansion within SANZAR.
"Negotiations on a new broadcasting rights deal will begin shortly and the inclusion of six South African franchises will be firmly top of our agenda."
Jurie Roux, the CEO of SARU, said that the decision to apply a promotion and relegation system from 2013 was standard practice in sport.
"We operate promotion and relegation in all our Currie Cup competitions, with the bottom-placed team being relegated unless it wins a play-off," said Roux.
"We lobbied hard with our partners in Australia and New Zealand to expand to 16 teams with the inclusion of a sixth South African franchise from next season, but they had no incentive to change what has been a winning format.
"Our strategic goal is to have six strong franchises covering the whole of South Africa and this decision keeps all of them in play on an annual basis."