Sri Lanka Cricket (SLC) said its executive committee agreed unanimously that the October 29 match in Lahore should go ahead as scheduled following reassurances of the best possible security.
The board said it "confirmed its commitment to play the third T20" in Lahore following assessments made by both Sri Lankan and Pakistan government authorities, independent security experts and the International Cricket Council.
"Accordingly, the selection committee of the SLC will finalise a squad of 22 by Tuesday and announce the final 15 on Friday," the SLC said in a statement.
SLC chief Thilanga Sumathipala will accompany the team to Lahore, the statement added.
The October 29 match will be the first played in Pakistan by Sri Lanka -- or any other top international team -- since militants ambushed its team bus en route to the Lahore stadium in 2009, wounding at least seven players.
Doubts over whether the match would take place were raised over the weekend when some players expressed concerns for their safety and the board said it would review security reports, making a final determination on Monday.
Lahore will host the T20 series finale following several matches played in the United Arab Emirates (UAE), where Pakistan have played their "home" internationals since the ambush.
Since 2009, the only international team to visit Pakistan is Zimbabwe, who played five limited-overs games in Lahore in 2015.
But after Pakistan successfully staged the final of its domestic Pakistan Super League tournament in Lahore under heavy security this March, the country hoped international games could once again resume.
A successful series against a World XI team featuring top foreign players in Lahore last month further boosted calls for cricket to return to the militancy-racked nation.
Sri Lanka Cricket chief Sumathipala in August appealed for an end to Pakistan's isolation -- a statement welcomed by Pakistani cricket officials -- and urged countries to come to play.
He recalled that several Test nations did not want to visit Sri Lanka at the height of the Tamil separatist conflict, when bombs were exploding in the capital in the mid-1990s, but Pakistan and India had toured Sri Lanka at the time.