The Blacks Caps have taken second place in the one-day international rankings from South Africa.
Victory in the Asia Cup has lifted Sri Lanka to third place in the annual update, but they did not quite do enough to jump above New Zealand.
South Africa slid down the table following disappointing resultsin last year's ICC Cricket World Cup and a heavy series defeat in New Zealand.
Sri Lanka will, however, have a chance to climb to second when it takes on South Africa at home over the coming weeks, the ICC said.
New Zealand's ascent caps a remarkable improvement since the start of the year during which it has climbed from eighth position. Following strong performances at home, the Black Caps won the NatWest Series against England and the West Indies in England.
Australia remain top of the table, holding a comfortable 20-point cushion.
