An Sprint Cancellation is essentially a drastic event where it ends up blowing up the sprint and starting a new sprint instead. An sprint cancellation is most often the result of a drastic change in business plans. Something so traumatic that continuing the sprint does not make any sense.
But an abnormal termination can often be called if the team gets partway into a sprint and discovers that the work is going to take much longer than they’d anticipated in sprint planning. Sometimes a few days of experience with a new technology or in an old part of the code reveals that implementing something will take a lot more effort than previously thought–so much more, in fact, that the product owner may not want the functionality at its new cost.
Who should have the authority to cancel the sprint?
The decision to cancel the Sprint is most often a business decision. Rarely would a technical reason so grave that the sprint needs to be cancelled. Therefore Product Owner has the authority to cancel the Sprint. However in rare circumstances, the development team may request the Product Owner to cancel the sprint for technical reasons.
What to do after the Sprint is Cancelled?
Do a Sprint Review and see if something of value is created. If something of value is created then it might be worth considering taking that work as a Product Increment
First do a retrospective on why we had to cancel the Sprint and how it can be avoided in the future
Then plan the next Sprint
Sprint Cancellation is extremely traumatic for the Scrum Team and should be attempted as an emergency response only. Generally the Sprint lengths are so short that it hard to imagine a change in business priority so big that it warrants a cancellation.