The three prison guards held hostage by inmates of the Vavuniya prison have been freed following a rescue operation launched by the military and the police.
Riot police fires teargas inside the prison as the military and police special task force officers moved in and rescued the three hostages.
There were no immediate reports of any casualties during the rescue operation and some of the prisoners have now been transferred to Anuradhapura.
The three prison guards at the Vavuniya prison were taken hostage the previous evening by LTTE suspects who are jailed at the prison and overnight negotiations to secure the release of the hostages had failed, an official in the area told Xinhua.
He said that as a result, an operation was launched to rescue the three prison guards and the area surrounding the prison had been cordoned off.
The rebels held at the prison were angered over moves to transfer some of the prisoners to another detention center in the south.
Three prisoners were transferred to the Boosa detention center in Galle following a court order.
The hostage takers demanded that the three inmates be returned to the Vavuniya prison immediately in order to set the prison guards free.
The Vavuniya prison has in the past had tensed situations caused by LTTE suspects jailed during and after the war.
Following 30 years of war, the Sri Lankan military defeated the rebels three years ago and while some of the rebels who either surrendered or were captured had undergone rehabilitation, the most notorious rebels were jailed.
Some of the suspected Tamil Tiger prisoners however have not yet faced court charges and the government had recently decided to open new courts to expedite their cases.