King Mswati of Swaziland, who was chairing the summit, had earlier said that the recent takeover was unconstitutional and "violates basic principles, protocols and treaties".
Rajoelina led months of protests against Ravalomanana, accusing him of misspending public funds and behaving like a dictator, before the president stepped aside after losing the support of elements of the military.
Ravalomanana transferred his powers to a group of military leaders on March 17, but they quickly asked Rajoelina to form a transitional authority.
He has pledged to hold presidential and parliamentary elections within two years, as well as vowing to change the constitution.
Sadc's decision leaves Rajoelina largely isolated on the international stage.
The United States and the European Union describing the transition as a "coup", while the African Union suspended Madagascar on March 20 and told the new administration to hold an election within six months.Rajoelina defiant
However, Rajoelina remains defiant and, before the decision was made by Sadc, he questioned the body's relevance.
"I can't decide alone, but it is not in the interests of Madagascar to be a member," he said.
"The prospect of an Sadc intervention is unacceptable. Other states cannot interfere with the decision of [Madagascar's] high constitutional court."
Rajoelina also said that auditors were reviewing all contractors with foreign investors as the country was receiving too little revenue.
"When you look at the rate of fees fixed, and those that must be paid, there is a large gap," he said. "This concerns all the contracts, especially in the mining sector."