Highways Minister Jeyaraj Fernandopulle was attending a function to mark the forthcoming Sinhala and Tamil New Year in the western district of Grampaha.
The defence ministry blamed Tamil Tiger rebels, who want an independent state for Sri Lanka's Tamil minority.
Mr Fernandopulle is the second minister to have been assassinated this year.
The former minister for nation building, DM Dassanayake, was killed in a bombing on 8 January, days after the government pulled out of a crumbling ceasefire with the Tamil Tigers.
The government has since vowed to crush the separatist rebels by the end of this year or the next. At least 70,000 people have died since the war began in 1983.
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