The biennial event was due to be held in India in September, sparking protests from the Pakistan Cricket Board (PCB) who called for the event to be relocated.
Pakistan Cricket Board was reluctant to send its team across to India.
The Board of Control for Cricket in India (BCCI) was keen to host the Asia Cup between September 13 and 28 but the Indian government has put a spanner in the board's plan.
The decision was taken during a meeting of the Executive Board in Kuala Lumpur headed by ACC President and Pakistan Cricket Board (PCB) chairman Najam Sethi.
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Pakistan will also host the Annual General Meeting, the next one set to be held later this year. The tournament will be hosted by India, but it will be played at UAE, in Abu Dhabi and Dubai.
Rana said six Asian teams will compete in the 50-over Asia Cup.
What about Emerging Nations Cup?In addition, the 2018 Emerging Teams' Asia Cup will be co-hosted by Pakistan and Sri Lanka.
The final of the Emergent Trophy will be played in Sri Lanka and the matches involving Pakistan and India will be played at their respective home grounds.
The UAE has in recent times established itself as a central hub for global cricket. The Twenty20 series was drawn while Pakistan won the ODIs 2-1. The modalities of the tournament will be worked out later.