Sources told "Sky News Arabia" that authorities raided a place in the city, after receiving information about the existence of an explosives factory.
When security forces arrived, three explosions took place, followed by an exchange of fire, and a fourth explosion occurred later, according to sources.
Security sources in Sri Lanka have estimated that the blasts were caused by suicide bombings in the Samantori area, 225 km east of Colombo.
Later, the local media published pictures showing a large number of sticky packages in Samantori, detonators, Daesh flags, and drones.
The Sri Lankan army said its troops were engaged in a battle against militants linked to the terrorist attacks, which took place on Easter.
Zahran Hashim, the leader of the extremist Tawhid group, known for his terrorist attacks on social media, was killed in one of the suicide bombings, the authorities said, adding that they had arrested the group's second-in-command.
Investigators have concluded that the attackers received military training from a person named Armie Mohiuddin, and weapons training was conducted abroad and in some locations in the eastern province of Sri Lanka.
Sri Lankan President Mithripala Serecina told reporters in Colombo that about 140 people in the island state had been identified as having links to the Daesh.
On Sunday morning, suicide bombings targeting 3 churches and 4 hotels rocked Sri Lanka leaving 253 people dead and some 500 injured.
Source: Sky News