A three-judge bench headed by Chief Justice Sarath Silva held that it was also illegal for her to occupy a state bungalow refurbished at huge cost to the state.
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Kumaratunga completed two terms as the all-powerful executive president in November 2005 and was succeeded by her prime minister Mahinda Rajapakse. The two are from the same party, but are seen as having a serious personality clash.
"The Supreme Court also ordered the former president to pay 100,000 rupees (925 dollars) to three individuals who filed the case challenging the state privileges accorded to her," a court official said.
Three lawyers petitioned the court last year, arguing that the fundamental rights of the 20 million people in Sri Lanka were violated as a result of the extravagant spending on Kumaratunga.
The former president retained a staff of 198 and used 36 vehicles after she stepped down.
The constitution allows a former president to use two cars and a staff of about 25.
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Last year, Kumaratunga said she ha