The Sri Lankan government has withdrawn from a ceasefire agreement with fighters belonging to the separatist Liberation Tigers of Tamil Eelam (LTTE).
The move came as a bomb explosion in the capital, Colombo, killed at least four people and injured 20 on Wednesday.
Ratnasiri Wickramanayake, the prime minister, proposed the annulment of the truce to the cabinet, and it was approved unanimously on Wednesday.
Chandrapala Liyanage, a presidential spokesman, said that "the cabinet of ministers today decided to pull out of the ceasefire".
"The legal process will now kick in," he added.
Under a ceasefire arranged by Norway in 2002, the government and the Tamil Tigers were given the option to pull out after giving two weeks notice to the Norwegian government.
Sinnappu Maharasinggam, chairman of the Tamil Action Committee, told Al Jazeera that the government abandoned the ceasefire in order to continue the conflict.
He said: "Once the agreement is removed, and they are no longer bound by international community, they have free rein to kill, particularly more opposition figures and those against government policies.
"Countries following the fighting should be very concerned about this development."
The formal end to the ceasefire came after months of renewed fighting on the ground which was highlighted by Wednesday's blast near a bus carrying soldiers at a busy junction in the Slave Island district.
The director of the National hospital in Colombo said 20 people were admitted to hospital with blast wounds.
Four people were killed, including two soldiers, he said.
Rasiah Ilanthiraiyan, a spokesman for the Tamil Tigers, based in their stronghold of Kilinochchi, denied responsibility.
"We have nothing to do with that. It is up to the government to find out who did it," he said.
The Sri Lankan military has claimed to have killed hundreds of Tamil Tiger fighters in recent months.
But analysts say both sides often exaggerate enemy losses and play down their own.
The government of Mahinda Rajapaksa, the Sri Lankan president, has vowed to destroy the Tigers' military assets and to clear the group from territory it controls in the island's north.
The army captured the Tigers' eastern strongholds earlier this year.
Military analysts say there is no end in sight to the conflict. At least 70,000 people have died since 1983 in the separatist struggle.