Updated Sri Lanka Navy spokesman D K P Dassanayake says three Tamil Tiger suicide boats attacked the merchants ships Nimalawa and Ruhuna around 5.10 am, off the Kankasanthurai harbhour at the northern tip of the island.
The Navy had destroyed two of the explosive laden suicide boats, with the ship Nimalawa damaged in the blasts, he said.
The defence ministry said "considerable damage" had been caused to the ship's hull.
The Navy had captured the third Tamil Tiger boat, Dassanayake said.