Jathika Bhikku Federation (Federation of Buddhist Monks) had filed the petition against the annual sacrifice of animals conducted at the Munneswaram Kovil in the north-western town of Chilaw.
"The order we received today (from the Appeal Court) was the result of action over the last one year", Ven Thumbugoda Sarananda of the JBF said.
The Attorney, Raja Dep, who appeared for the petitioners said that anyone wanting to perform animal sacrifice from now on will have to obtain a license.
Sri Bhadra Kali Amman Kovil in Munneswaram, Chilaw draws thousands of pilgrims from all communities and religions and animal sacrifice is carried out on the final day of the annual festival.
A government minister during the 2011 festival stormed the sacrifice site and released all animals who were being readied for slaughter.
The sacrifice of around 1,000 goats and chicken as part of the ceremony has angered animal rights groups and Buddhist majority nationalist groups who want the practice banned.