The women's event will be staged in Galle from 26 September 26 to October 1 with the semi-finals and the finals to be played before the men's semi-finals and final at R Premadasa Stadium in Colombo on October 4, 5 and 7 respectively.
"The confirmation was conveyed to the Board of Control for Cricket in India on behalf of the committee. Malhotra will replace Sultana who is suffering from a virus and is unable to compete in the event," the ICC said in a statement.
Any injury or illness-based replacement requires a written submission to the event technical committee along with a diagnosis from a medical practitioner to ascertain the extent of the injury or illness.
"Once replaced, a player may not return to the squad save as an approved subsequent replacement for another injured or ill player."
Thirty-one-year-old Malhotra, a right-handed batter and legbreak spinner from Delhi replaces Sultana who is a slow-left arm orthodox spinner and right-handed batter.
As with all players in the tournament, the eligibility of a replacement player is subject to approval by the ICC before that player can be officially added to the squad.
The Event Technical Committee of the ICC World Twenty20 Sri Lanka 2012 consists of Geoff Allardice (ICC, chairman), Ajit Jayasekera (host representative), Campbell Jamieson (IDI representative), Ashley D'Silva (host representative), David Lloyd (independent nomination) and Ramiz Raja (independent nomination).