At least two people were dead and 54 injured.
The city is plunged into darkness and the airport shut. All flights to the Colombo airport have been diverted to India, reports say.
Two light aircraft bombed Colombo, hitting Sri Lanka's main Revenue Department building near the Air Force Headquarters before they were brought down by the military.
Shortly after the bombing around 9.30pm (local time), Sri Lanka's Air Force gave chase to the two aircraft and shot down one of them, military spokesman Brig. Udaya Nanayakkara said. He said the wreckage and the body of the pilot were recovered near Katunayake air base.
A government spokesman said the situation was under control nearly three hours after the surprise strike which also hit the Army Headquarters ground. Fifty-four people were injured and rushed to hospitals many of them with shrapnel wounds and splinter injuries.
Amid reports that the two planes could be on a suicide mission by the rebels, a defence ministry statement said the second aircraft was disabled by the anti air gunfire reportedly and crashed on the Inland Revenue building. The building suffered slight damages.
The island nation was put on high alert in the wake of what is being described as a desperate attempt by the Tigers to carry out surprise strikes that has come as an embarassment to the government which had claimed to have destroyed all the
rebels' hidden runways and rendered its small air wing powerless.
Meanwhile, a pro-LTTE website said the Tamil Tigers air wing carried out the attacks.
Blasts were heard in the capital at many places as the military fired anti-aircraft guns in several locations.
Power was cut off in an around Colombo and searchlights pointed towards the sky to detect any suspected LTTE aircraft. According to sources, the aircraft were first detected by radars in Mannar minutes before the strikes in Colombo.
Image: What's happening? That seems to be the mood of these Lankan soldiers, who stand next to a smashed window opposite the country's tax headquarters in Colombo on Friday.
Text: PTI; photograph: Nir Elias/Reuters