The cocaine was detected aboard a ship that arrived in the capital Colombo from Ecuador and was bound to India, police spokesman and Deputy Inspector General Ajith Rohana said.
Sri Lanka Police Narcotics Bureau (PNB) acting on a tip-off seized over 800 kilograms of cocaine concealed inside a container loaded with teak logs, Rohana said.
"This is the largest drugs haul ever in South Asia," Rohana said. The street value of the cocaine haul is estimated at Rs 12 billion.
"The drugs were concealed in a container of timber and addressed to a company in India," Rohana said.
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Further investigations are being carried out with the help of intelligence units in Ecuador Belgium, Saudi Arabia and India.
During the last one year, there have been several detections of cocaine by Sri Lankan narcotics officials in sugar shipments from Brazil mainly.
In June, Sri Lanka seized 90 kilos of cocaine originating from Brazil.