Sri Lanka's Tamil Tiger fighters said their leaders reopened the water sluice in the island's east on Tuesday "on humanitarian grounds".
The government was not immediately available for comment or to confirm the blockade had been lifted.
The island's Nordic truce monitors confirmed that the sluice gate had been opened.
Sri Lankan government officials have said the army will only stop a military campaign to secure the area if the Tigers vacate the area around the sluice entirely to avoid another future blockage from choking the flow of water to farmers in government territory.
The gesture followed another violent day in the war-torn country, where at least two people, including a child, were killed in a car blast in the capital, Colombo, and two more international aid group workers were found dead in the northeast of the country.
The Sri Lankan military said that several other people were wounded in Tuesday's car bomb in front of a girls' school in Colombo.
"The blast was near St Paul's college. It was a van," said a military spokesman.
Military officials said they believed the van belonged to a minority Tamil politician opposed to the separatist Liberation Tigers of Tamil Eelam (LTTE).
Five people were admitted to hospital with burns.
Earlier on Tuesday, an international aid group said it found the bodies of two more of its workers after 15 others had been discovered killed last week in northeast Sri Lanka.
Action Against Hunger said on Tuesday the latest bodies were in the same seaside town of Muttur where the 15 others were found dead on Friday.
The victims included 16 Tamils, Sri Lanka's largest ethnic minority, and one Muslim.
The slayings raised outrage internationally, and aid organisations demanded that the perpetrators be brought to justice.
Soldiers inspect the site of the
blast in Colombo on Tuesday
The group has said it will suspend operations in the area, where it was helping to rebuild after the 2004 Indian Ocean tsunami.
In the eastern Ampara district, a bomb blast killed two anti-terrorism police commandos in on Tuesday.
The commandos - members of the government's Special Task Force - were travelling on a truck when the blast occurred.
Also on Tuesday, a military spokesman said that suspected Tigers had earlier ambushed a government patrol near an air force base, killing one airman and wounding two more.
One civilian was also hurt in the attack in Trincomalee district, about 215km northeast of Colombo, he said.
The latest violence began July 20 when Tamil Tigers blocked water supplies to 60,000 people in government-controlled villages in the northeast.