Sports ministry spokesman Srilal Gomes said a disciplinary inquiry initiated in November uncovered evidence of "sexual harassment" against women players and a report was submitted on Thursday.
"This is a very serious matter and the next step will be to take internal disciplinary action in addition to a criminal prosecution under the penal code," Gomes told AFP.
He did not name the officials or the players who had been harassed, but said criminal action in line with women and child protection laws was being taken.
Reports had claimed that selection and team officials, who were not identified, demanded sex from players in return for securing them a place in the team.
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Sri Lanka's Children's Minister Rosy Senanayake, who is also responsible for women's issues, told reporters here today that she was closely following the case.
"It is a shameful incident," Senanayake said. "We want to put a stop to this kind of behaviour."
She said she was closely monitoring the progress of the case and wanted the perpetrators brought to justice.