After suffering a defeat in the second Test against Sri Lanka, Australia lost their top position to South Africa in the World Test Championship points table.

Sri Lanka on Monday (July 11) registered an innings and 39-run victory over Pat Cummins' Australia in Galle to level the two-match series 1-1.

As a result, the championship table saw Sri Lanka climbing to third and now the race to make the final has spiced up.

"South Africa take over as the new leader on the latest standings with a win-loss percentage of 71.43 percent, while Australia drop to second with 70 percent after their first Test loss in the current period," ICC said in its official release.

"Sri Lanka are now firmly in the mix for the World Test Championship final next year, with their win helping them jump in front of Pakistan, India and West Indies."

After Australia thumped Sri Lanka in the series opener by 10 wickets, the hosts staged a staggering comeback to humiliate the tourists in the second Test. Batting first, after winning the toss, Australia had a decent outing in the first innings. On account of Steve Smith’s unbeaten 145 and Marnus Labuschagne’s 104 runs, they posted a total of 364 runs.

In reply, Sri Lanka rode on half-centuries from skipper Dimuth Karunanratne (86), Kusal Mendis (85), Angelo Mathews (52), Kamindu Mendis (61) and an unbeaten double century from Dinesh Chandimal (206) to pile up a mammoth 554 on the board, taking a huge first-innings lead of 190 runs.

Prabath Jayasuriya, who took 6 wickets in the first innings, claimed the same number of wickets in the second essay as Sri Lanka bundled out Australia for just 151 runs to win the match by an innings and 39 runs.

Australian skipper Pat Cummins termed the loss a "reality check" for his team.

"The reality is some of our players haven't been here before. So you could call it a reality check, because it's a first experience," Australian coach Andrew McDonald said, agreeing with the captain.

"It's a sample size of one. We have the opportunity to learn from that. And we'll take that. But we learned a hell of a lot in the first game too.

"You can learn through winning and you can learn through defeat too."

Australia's next Test assignment is at home against West Indies in November while Sri Lanka is set host Pakistan in a two-Test series, starting July 16.

(With AFP inputs)