Criminal Investigations Department (CID) told the Mount Lavinia magistrate's court that Gotabhaya Rajapakse, who was Sri Lanka's defence secretary during his brother's rule, directed a secret unit which is accused of assassinating a newspaper editor in January 2009.
The CID said it found evidence that the death squad was controlled by Gotabhaya Rajapakse who has already publicly denied involvement in the killing of former Sunday Leader editor Lasantha Wickrematunga.
"Testimony from the former army commander (Sarath Fonseka) shows that there was a special secret unit outside his authority and controlled by Gotabhaya Rajapakse through the then chief of national intelligence Kapila Hendawitharana," said a CID report which was read out in the court.
Fonseka who led Sri Lanka's successful military campaign against Tamil rebels in 2009 fell out of grace after he unsuccessfully challenged Rajapakse at January 2010 elections.
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Rajapakse had been accused of ordering the killing of many dissidents, but today's police report is the first to implicate him in an ongoing court case.
Wickrematunga's killing, which sparked an international outcry, drew attention to violence against Sri Lanka's media during Rajapakse's tenure that ended in 2015 when he lost elections by an opposition alliance.
Wickrematunga's body was exhumed in September for a fresh forensic test after allegations that the original autopsy report had been falsified to deliberately mislead investigators.
The Mount Lavinia Court also ordered police to carry our further investigations and arrest any suspects involved.
Speaking to AFP after today's court hearing, a senior police officer said that authorities were close to making more arrests over the murder, after five military intelligence officers were detained last month.