Urban Development Minister Champika Ranawaka said the casualties could have been much higher if the hall had been hosting a wedding at the time of its collapse, and that the owners would face criminal charges.
"This wedding hall is a clear example of the dangers posed by unauthorised construction in Colombo," the minister told reporters in the capital.
"A structural failure led to the collapse."
The capital has a population of over 7,50,000 people, while another half a million travel to it daily for work.
"We will take immediate steps to remove them."
Construction accidents are rare in Sri Lanka, but concerns have been raised about building standards during a construction boom in the aftermath of the island's 37-year- long civil war that ended in 2009.
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