The Australian government had also stepped into the controversy and directed Cricket Australia to remove Steve Smith as the captain with immediate effect.
The coach of the team, Darren Lehmann has, however, escaped any action so far.
Addressing a press conference on Saturday, Smith had insisted that Lehmann was not part of the conspiracy, even as a footage appeared to show the coach sending a message to the field through 12th man Peter Handscomb after the first footage of the incident.
Here are the top 10 developments around the ball-tampering controversy and the stepping down of Steve Smith and David Warner from their respective posts in the Australian cricket team:
1. Steve Smith steps down as captain: Australia's Steve Smith stepped down as captain of the national team on Sunday for the remainder of the ongoing third Test against South Africa in the wake of the ball-tampering controversy.
Vice-captain David Warner also stepped down for the rest of the match.
2. Australia jeered by South African crowd: Australian team was greeted by a mooted chorus, when stand-in captain Tim Paine led the team out at the start of the play on Day 4 of third test.
Paine is leading the team for the rest of the remaining third test as regular captain Steve Smith and vice-captain David Warner stood down following revelation of the ball tampering scandal.
3. Paine becomes interim captain: Tim Paine has been appointed as the acting captain for the rest of the test match.
4. Australian government asks Cricket Australia to sack Steve Smith as captain: In a rare move, the Australian government on Sunday asked the Australian Cricket board to remove Steve Smith as captain with immediate effect.
Commission (ASC) chief John Wylie, the ASC Board, and CEO Kate Palmer, essentially speaking for the Australian government have called for a severe action to be taken against everyone involved in the incident.
"The ASC condemns cheating of any form in sport. It expects and requires that Australian teams and athletes demonstrate unimpeachable integrity in representing our country," espncricinfo.com quoted a statement from the ASC.
Australian Prime Minister Malcolm Turnbull, too, slammed the national cricket team for cheating.
5. Aussie media slams Smith:
Australian media on Saturday described the ball tampering scandal as a drak day for sports.
The event dominated the headlines and captain Steve Smith and his teammates were widely condemned.
"What is extraordinary, I think, is how it was done and how easily it was agreed to by the team and how, not unapologetic, but sort of oblivious to the consequences Steve Smith and Cameron Bancroft seemed to be at the press conference," cricket writer Gideon Haigh told national broadcaster ABC.
6. Smith admits he was the mastermind of the plan: Speaking at a press conference, Smith said the ball tampering plan was hatched during the lunch break, adding that the team's "leadership group knew about it".
"The leadership group knew about it. We spoke about it at lunch. I'm not proud of what happened. It's not in the spirit of the game," said Smith.
Watch Steve Smith's press conference on the ball-tampering controversy
7. Cricket Australia launches tampering probe: Cricket Australia on Sunday launched a formal investigation into the matter.
"We are extremely disappointed and shocked at what we woke up to this morning, and we are dealing with this issue with the utmost urgency and seriousness. We certainly don't have all of the evidence at hand and we need someone to go over there and talk to the relevant people involved to understand what happened and the detail, and then we'll make appropriate decisions as to next step," cricket.com.au quoted Cricket Australia Chief Executive James Sutherland as saying.
8. Rajasthan Royals set to sack Steve Smith: According to media reports, the Rajasthan Royals team of the Indian Premier League is set to sack Steve Smith as its captain for the IPL 2018 following the recent ball-tampering fiasco.
Ajinkya Rahane would most probably lead the side in IPL 2018.
9. Cricket fraternity expresses disappointment: The cricket fraternity expressed shock and disappointment over the incident.
Former England captain Michael Vaughan said that Smith and the entire team will have to bear the brunt of this particular incident in their careers.
Steve Smith,his Team & ALL the management will have to accept that whatever happens in their careers they will all be known for trying to CHEAT the game ... #SAvAUS
— Michael Vaughan (@MichaelVaughan) March 24, 2018
Can we talk about this? pic.twitter.com/cmpRrOArgD
— Dale Steyn (@DaleSteyn62) March 24, 2018
10. Clarke open to returning as the captain:
My 2cents worth - This will be Darren Lehmann’s greatest test as a coach, cos I will struggle to believe that this was all Bancroft’s idea. #SandpaperGate.
— Kevin Pietersen (@KP24) March 24, 2018
Michael Clarke, who retired in 2015, has kept open the possibility he could return as Australian captain.
"If I was asked by the right people, then I would think about my answer," he told Australia's Nine Network.