A failure in the transmission line from the Kelanitissa power generation complex to Biyagama, in the outskirts of Colombo, is believed to have set off a chain reaction, causing a shut down of several thermal power plants, a Ceylon Electricity Board official told LBO.
Only the supply to the northern Jaffna peninsular, which is isolated from the main grid remained unaffected.
Sri Lanka has been prone to total grid failures with two such failures in the last six months.
Officials say they hope to have the entire system running within two and a half hours.
The CEB sells power below cost and is in dire financial straits.
Attempts to reform the utility has been frustrated by the Marxist-Nationalists Janatha Vimukthi Peramuna.
The government has also been unable to adjust power prices due to political pressure. .