The Syrian-registered ship, Captain Ali, was seized last week, and the Sri Lankan defence ministry said the cargo of food and other supplies had been destined for the now defeated Tamil Tiger rebels.
"The ship had tried to enter Sri Lankan waters without following the proper procedure," an official said, but added that a search of the vessel confirmed it was not carrying any arms or ammunition.
The organisers of the mission, Mercy Mission to Wanni, said on their website that the goods were meant for Tamil civilians caught up in the decades-long conflict.
An Icelandic national, Kristjan Guomundsson, who had served as one of the monitors of a truce between Tamil Tigers and troops between February 2002 and January 2008, was also aboard the Captain Ali.
The mission's website admitted the voyage may have violated international shipping and port safety procedures.
"If this is the case and the non-Mercy Mission persons responsible for this compliance did not fulfill their respon