Australia's Twenty20 World Cup title defence is over, knocked out of the tournament after England claimed a final-over win against Sri Lanka at the SCG.

Needing a victory to qualify for the semi-finals ahead of Australia, England chased down Sri Lanka's 8-142 with four wickets and two balls to spare to go into the final four.

After player of the match Adil Rashid's 1-16 proved crucial with the ball, Alex Hales hit eight boundaries in his 47 from 30 to set up the chase before a mid-innings collapse of 5-36.

But Ben Stokes was able to save the day for England, with his unbeaten 42 from 36 balls keeping in control late.

"A lot of credit goes to Ben Stokes," Jos Buttler told ABC Sport after the match.

"He's a man that takes a lot on his shoulders and really stands out in those situations … he's a guy that can win you a game with the bat, with the ball and in the field.

"He always wants to be the main man every game and we want him to score runs every game, but the nature of T20 cricket, that doesn't always happen.

The equation eventually got down to five runs from the final Lahiru Kumara over, before Chris Woakes cut the third-last ball for four with only two runs needed.

"It was a lot more nervy than it needed to be at one stage," Buttler admitted.

"But we found a way to get the job done."

At the expense of Australia, whose tournament was doomed from the moment they suffered an 89-run loss to New Zealand in their opening game.

Needing results to go in their favour ever since, Australia's match against England was washed out and they failed to make up the net run-rate deficit to reach the finals.