Australia, after defeating Sri Lanka overnight, will play India in the semi-finals of the Twenty20 World Championship after South Africa again choked in a major tournament.

The host nation had been the only undefeated team heading into the final game of the Super Eights stage and looked destined to meet Australia in the semi-finals as the top team from their group.

But they crashed spectacularly from first to third in pool E after losing to India by 37 runs in Durban.

It allowed India to claim top spot and New Zealand to sneak into the final four ahead of South Africa with a superior net run rate.

Australia earlier qualified for the semis as the second-placed team in group F after thumping Sri Lanka by 10 wickets in Cape Town.

Stuart Clark claimed 4-20 as Australia steamrolled a shellshocked Sri Lanka for 101, before Matthew Hayden (58 not out) and Adam Gilchrist (31 not out) posted their second century stand of the tournament to knock off the required runs with a massive 9.4 overs to spare.

Pakistan confirmed top spot in the group with a four-wicket victory over Bangladesh.

The final standings mean Australia will play India in Durban on Saturday night (0200 Sunday AEST) in the second semi-final, with Pakistan facing New Zealand in Cape Town earlier that day.

The final is in Johannesburg on Monday.

Australia's victory over Sri Lanka came at a cost with Shane Watson breaking down with a recurrence of his left hamstring strain in his first match of the tournament.

It leaves Australia with just 13 fit players, with skipper Ricky Ponting also out with a hamstring strain.

Watson's condition will be monitored over the next few days before a decision is made on whether he will join the rest of the squad for their one-day tour of India starting next week.

"He's saying it's not as bad he did it leading into the tournament but as to how long it will take for him to recover, I'm not sure," stand-in skipper Gilchrist said of Watson, who clutched at his left hamstring in pain after delivering the second ball of his fourth and final over against Sri Lanka.

AAP