Police sources said Premachandra and his bodyguard were slain by a group led by ruling party legislator Duminda Silva, who was also critically wounded in the gunbattle.
The sources said the two men were taken to separate hospitals, along with dozens of their supporters who were wounded. At least 10 automatic assault rifles were used in the exchange of fire.
Private poll monitors accused both groups of intimidating voters at polling booths in the area earlier in the day.
The two men had been bitter rivals, competing with each other for political as well as business influence in Colombo.
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Sri Lanka's system of preferential voting has often led to clashes between members of the same party.
A local curfew was declared in the Kolonnawa area where the shooting took place af