Information Minister Keheliya Rambukwella said record hauls of illegal drugs seized by police and customs pointed to a new smuggling operation using Colombo as a transhipment location.
"The quantities of illegal narcotics clearly suggests that this is not for consumption in the country, but to be re-shipped to some other countries," Rambukwella told reporters.
He said Australia could be a possible destination.
About 10 kilos (22 pounds) of heroin was found last week at the coastal resort of Hikkaduwa, a region where illegal boats going to Australia had been detected in recent years, the minister said.
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In August, Sri Lanka customs found 260 kilos (572 pounds) of pure heroin in a container at the Colombo port. The cargo had been sent from Pakistan and declared as grease.
Police are investigating a senior official from the Prime Minister's office who asked local authorities to waive demurrage charges and speed up the clearing of the container later found to hold one of the biggest hauls of heroin identified in Sri Lanka.
Rambukwella said an independent investigation was underway into that smuggling attempt as well as several others.