Lakshman Kadirgamar, 73, was shot in the head and the heart at about 11pm local time (5pm GMT) and taken to the National Hospital in the capital, Colombo, where doctors were unable to save him.
The Inspector General of Police, Chandra Fernando said Mr Kadirgamar had just returned to his heavily- guarded home in Colombo when snipers hiding in nearby buildings opened fire.
"The injuries were critical and he has gone," said the Media Minister, Dilan Perera.
Mr Kadirgamar, a member of Sri Lanka's Tamil minority, was highly critical of the Liberation Tigers of Tamileelam and led an international campaign to ban the Tigers and brand them as a terrorist organization. He was a close aide of President Chandrika Kumaratunga, who appointed him as foreign minister in April 2004.
There was no immediate claim of responsibility for the shooting but a military spokesman, Brigadier Daya Ratnayake, said that police had arrested two Tamil men in the past week who were taking videos of the area around Mr Kadirgamar's house.
"We have reasons to believe that he was killed by the Liberation Tigers of Tamileelam," said Brigadier Ratnayake. "He was always under threat."
Rebel attacks against Sri Lankan political leaders were common until a February 2002 ceasefire. In 1999, Mrs Kumaratunga was gravely wounded in a rebel assassination attempt that killed 26 people. On Friday, she rushed to the hopsital to be with Mr Kadirgamar.
Tension between the government and the Tigers have spiked recently after a surge in violence in the volatile eastern region that has sometimes spilled into the capital, Colombo.
Scores of people - including security forces, rebels and civilians - have been killed since a senior Tiger leader split from the mainstream group last year with some 6,000 fighters. Each side has blamed the other for the violence.
On Thursday, Anton Balasingham, the London-based chief negotiator for the Tamil Tiger rebels, warned that Sri Lanka could slip back into civil war unless the government stopped backing armed groups that the rebels claim are attacking them.
Mr Balasingham accused the government of paying and providing logistics support to paramilitary groups, allowing the armed forces to "sustain a shadow war" against the rebels.
He called it a grave violation of a 2002 ceasefire agreement between the rebels and the government, which denies supporting paramilitaries.
The Tamil Tigers began fighting in 1983 for a separate homeland for minority ethnic Tamils in the country's north and east, claiming discrimination by the majority Sinhalese. The conflict killed nearly 65,000 people before the February 2002 cease-fire.
Post-truce peace talks have been stalled since 2003 over rebel demands for wide autonomy.Reuse content