The decision was made in a meeting of the SAFF executive committee at Kerala's Trivandrum on Saturday.
The 12th edition would commence in December, 2017, according to SAFF General Secretary Anwarul Haque Helal.
"Maldives and Bhutan had also bid to host (the 2017 edition) but the latter withdrew. The members considered Maldives at the meeting," he said on Saturday.
"But after further discussions and taking the views of WSG (World Sports Group), Bangladesh has been selected (as the venue for the championship)."
Bangladesh had earlier hosted the tournament in 2003 and 2009. The men in red and green clinched their only title of the biennial competition in 2003.
They lost to India in the semis in 2009.
Bangladesh's 2015 SAFF Championship ended in disappointment when they crashed out from the group phase for a third successive time.