Bangladesh cricket chiefs said on Wednesday that Pakistan had refused to release any of its players for a Twenty20 competition which begins this week after a planned bilateral series had to be scrapped.
Pakistan had been due to host Bangladesh for a Twenty20 game and a 50-over match in Lahore this month in what would have been its first home internationals since a deadly attack on the Sri Lankan team bus nearly four years ago.
But the Bangladesh Cricket Board (BCB) cancelled the tour, saying Pakistan was not safe for its players.
According to a BCB spokesman, Pakistan has now responded by preventing any of its stars from competing in the Bangladesh Premier League which begins Thursday.
"The chief executive officer of PCB (Pakistan Cricket Board) called our CEO today and informed him that they won't allow Pakistani players to play in the BPL until we send our team to their country," spokesman Jalal Yunus told AFP.
"We've now decided to host the event without Pakistani players," he said, adding the BPL's seven franchises would now find replacements for the 26 Pakistani players they bought in the auction last month.
The move represents a major blow for the second edition of the BPL since Pakistani cricketers have a big following in Bangladesh.
More than 50 Pakistani players took part in the auction for the second edition of BPL, with opening batsman Imran Nazir fetching $280,000.
Last year more than 20 Pakistani players took part in the inaugural edition, with all-rounder Shahid Afridi sold for the highest fee of $700,000.
No international matches have taken place in Pakistan since the militant attack on the Sri Lankan team bus that killed eight people in March 2009.
Spokesman Yunus said Bangladesh has not ruled out touring Pakistan in the coming months but wanted to reassess the security situation before sending a team.
Bangladesh was also due to tour Pakistan last April, but the tour was blocked by the Dhaka High Court on security grounds.
Anti-Pakistan sentiment still runs strong in Bangladesh, which was part of Pakistan until 1971 when it won independence after a nine-month war.