Phangiso underwent independent tests after being reported for a suspected illegal action last month.
Cricket South Africa announced on Tuesday that tests conducted at an International Cricket Council-accedited laboratory in Pretoria last Friday had found that all variations of his bowling action exceeded the 15 degrees of tolerance allowed.
Phangiso has been withdrawn from the first two of South Africa's three Twenty20 internationals against Australia, starting in Durban on Friday.
He will undergo further tests on Monday to establish whether he can play in the final match against Australia on March 9 and travel with the South African team to the World Twenty20.
Phangiso was reported after the domestic one-day semi-final but pending the results of the tests was able to help his team, the Lions, beat the Cape Cobras in the final in Cape Town last Sunday, taking three wickets for 33 runs.
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