The ship was sunk Sunday off Sri Lanka's east coast by naval ships and aircraft after a tip-off from a neighboring country, defence spokesman Keheliya Rambukwella said, without elaborating.
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"We know that the ship originated from a port in Indonesia and there could be at least two other similar ships," Rambukwella said. "We are on the look-out and obviously we had good information from a friendly country.
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Rambukwella said the Liberation Tigers of Tamil Eelam (LTTE) were probably trying to smuggle in artillery and anti-aircraft missiles after suffering a string of setbacks in recent clashes with the military in the north and east.
There has been an upsurge in violence in the decades-old ethnic conflict in Sri Lanka with more than 1,500 people killed since December in tit-for-tat killings, despite a ceasefire in place since 2002.
Fighting has been particularly intense around the Trincomalee district, home to a major airbase and naval port, and in the northern peninsula of Jaffna,